Should buy now, pay later affect credit scores?

Summary

Marketplace Morning Report Summary Episode: Should Buy Now, Pay Later Affect Credit Scores?
Release Date: August 7, 2025

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1. Intel CEO Resignation Demanded by President Trump

Timestamp: [01:01]

David Brancaccio opens the episode by highlighting a significant development in the tech industry. President Trump has publicly called for the immediate resignation of Intel Corporation's new CEO, Lipp Bhutan. The president cited concerns regarding Bhutan's connections to Chinese companies, raising questions about potential conflicts of interest. Senator John Cornyn of Texas also echoed these sentiments, emphasizing the need for leadership changes at Intel to address the company's lagging performance amid the booming artificial intelligence sector.

• David Brancaccio ([01:01]): "President Trump calls for the immediate resignation of the new CEO of microchip giant Intel Corporation."

As a result of these developments, Intel's stock has experienced a slight decline of 2%. The situation remains dynamic as Bhutan has yet to respond to the allegations, leaving the company's future leadership uncertain.

2. Employment Trends and Rising Long-Term Unemployment

Timestamp: [01:49]

Brancaccio transitions to economic indicators revealing a concerning trend in the labor market. Diane Swonk, Chief Economist at KPMG, shares insights into the increasing duration individuals are spending searching for jobs. July saw an average job search period extending by a week compared to June, marking a significant uptick within a single month.

• Diane Swonk ([01:49]): "The month of July, we saw a week longer in the search for a job from June. That's a big jump in one month's time."

Additionally, the proportion of long-term unemployed individuals—those without employment for over 27 weeks—is rising. Swonk cautions that such trends typically precede recessions, indicating underlying vulnerabilities in the labor market. While the overall unemployment rate remains historically low due to a slowed supply and demand for workers post-pandemic, the data reveals challenges for those not already employed.

• Diane Swonk ([01:49]): "We know that the supply of workers has slowed down along with the demand for workers, which has kept the unemployment rate at historic lows."

3. Buy Now, Pay Later (BNPL) and Its Impact on Credit Scores

Timestamp: [03:07] - [04:36]

The discussion shifts to the evolving landscape of consumer credit, specifically the rise of Buy Now, Pay Later (BNPL) services. Samantha Fields from Marketplace explores how BNPL is poised to influence traditional credit scoring models.

• Samantha Fields ([03:07]): "Buy Now Pay later for almost anything. A couch, new clothes, groceries. Just walk into a store or go online, pick what you want and check out."

BNPL offers consumers short-term loans without the need for credit cards or upfront payments. However, Chi Chi Wu of the National Consumer Law Center raises concerns about the accumulation of multiple BNPL loans for small purchases, complicating their integration into existing credit scores.

• Chi Chi Wu ([03:22]): "People often take out a bunch of BNPL loans for a bunch of small purchases, which is one reason it's tricky for credit bureaus to factor them into your credit score."

Traditionally, opening numerous new accounts simultaneously signals financial distress, potentially harming credit scores. However, Liz Pagel from TransUnion clarifies that credit bureaus are developing new models to accurately assess BNPL activity without penalizing consumers who responsibly use these services.

• Liz Pagel ([03:45]): "The credit bureau is working to come up with an entirely new model instead to more accurately evaluate BNPL loans."

Samantha Fields emphasizes the potential positive impact of BNPL on financial inclusion, noting that timely repayments could enhance credit scores for many users.

• Samantha Fields ([04:09]): "Most customers who use Buy Now Pay later pay on time, which could help their credit scores."

However, Chi Chi Wu warns that the broader financial industry's perception of BNPL usage remains uncertain, which could influence lenders' views on borrowers utilizing these services.

• Chi Chi Wu ([04:23]): "We don't know how lenders are going to view this. They're going to look positively upon BNPL loans that are repaid or whether they'll draw negative inferences."

4. Economic Pulse: Challenges in the Construction Sector

Timestamp: [05:26] - [08:32]

In the "Marketplace Economic Pulse" segment, Brancaccio interviews Maurice Romming, President of O'Neill Construction Group in Portland, Oregon, to gain insights into the construction industry's current state.

• Maurice Romming ([05:52]): "It's extremely volatile. I think there's just a number of things that we have to factor in that we didn't have to factor in in the past."

Romming discusses the multifaceted challenges facing the construction sector, including persistent supply chain disruptions, fluctuating interest rates, and evolving tax policies. Unlike previous concerns centered on labor shortages and material logistics post-COVID, the present landscape is influenced by geopolitical tensions and monetary policies.

• Maurice Romming ([06:18]): "We have how the terrorists actually affect what we do, monetary policies as far as interest rates and the tax policies."

Looking ahead to the fall, Romming emphasizes the necessity for economic stability to facilitate hiring. The unpredictability of market conditions makes it difficult to commit to expanding the workforce without assurance of sustained growth and manageable risks.

• Maurice Romming ([07:20]): "If there is more consistency on this is where it's going to be and it's going to be there for at least a few years. That helps us better to plan our projects."

Romming concludes by highlighting the intricate balance between construction management and economic forecasting, underscoring the heightened complexity of decision-making in today's volatile environment.

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Conclusion

This episode of Marketplace Morning Report delves into critical developments affecting the business and economic landscape. From high-profile leadership changes at Intel and shifting employment dynamics to the transformative potential of Buy Now, Pay Later services on credit scoring, and the intricate challenges within the construction industry, the report provides a comprehensive overview of factors shaping the current market environment.

Transcript

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[David Brancaccio]

President Trump calls for an immediate change in leadership at a top US Company. I'm David Brancaccio in Los Angeles. There's news this morning. President Trump has called for the immediate resignation of the new ish CEO of microchip giant Intel Corporation. Republican Senator John Cornyn of Texas has raised issues about Lipp Bhutan's ties to Chinese companies. Tan had been brought in to fix intel, which has lagged as rival firms have surged ahead amid the artificial intelligence wave. He's not yet responded to the conflict of interest claim. Trump posted. There's no other way than the CEO resigning. Intel stock is down 2% right now. We're also keeping an eye on data showing it is taking longer for people to find jobs. Diane Swonk, chief economist at kpmg in.

[Coffee Drinker]

The month of July, we saw a week longer in the search for a job from June. That's a big jump in one month's time. And what we're seeing as well is the ranks of the long term unemployed. Those are people who are unemployed for more than 27 weeks are rising as a share of the overall labor force. That usually only happens after we've entered a recession. Now, we know a lot of things about the labor market and where we are today post pandemic is very different than what we saw pre pandemic. We know that the supply of workers has slowed down along with the demand for workers, which has kept the unemployment rate at historic lows. That's the good news. The bad news is that when you look underneath the COVID of that data, it reveals a hard time for those people who don't already have a job.

[David Brancaccio]

Economist Diane Swonk the stock market is now open for the day and The Dow is up 157 points. 4. 10%. The S&P up 5. 10%. The Nasdaq is up 9. 10 of a percent. Two companies that offer popular instant microloans want to know more before they furnish data on their customers to a big credit score company. FICO is set to revamp its system to include Buy Now, Pay Later Activity and Formulated Consumer Scores Marketplaces. Samantha Fields has that you can use.

[Samantha Fields]

Buy Now Pay later for almost anything. A couch, new clothes, groceries. Just walk into a store or go online, pick what you want and check out. No credit card, no money down.

[Coffee Drinker]

These are very short term loans. They're usually paid off very quickly.

[Samantha Fields]

Chichi Wu at the National Consumer Law center says people often take out a bunch of BNPL loans for a bunch of small purchases, which is one reason it's tricky for credit bureaus to factor them into your credit score, least with their current models.

[Coffee Drinker]

Traditionally, credit scoring models have assumed if you're opening up a whole bunch of new accounts all at once, that's a sign of financial trouble.

[Samantha Fields]

So if every time you use Buy Now Pay later, it's considered a new line of credit, woo says that could hurt your score. Liz Pagel at TransUnion says that is not the approach they would use. The credit bureau is working to come up with an entirely new model instead to more accurately evaluate BNPL loans.

[Coffee Drinker]

We believe this could be one of the most meaningful financial inclusion opportunities in.

[Samantha Fields]

A generation because she says most customers who use Buy Now Pay later pay on time, which could help their credit scores. But Chi Chi Wu at the National Consumer Law center says it's not just what the credit bureaus will do with the data.

[Coffee Drinker]

We don't know how lenders are going to view this. They're going to look positively upon BNPL loans that are repaid or whether they'll draw negative inferences and assume that the person might be having some sort of.

[Samantha Fields]

Financial trouble just because they used Buy Now Pay later in the first place. I'm Samantha Fields for Marketplace.

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[David Brancaccio]

Let's take the marketplace economic pulse views of the economy from a range of perspectives today. Catching up with a building contractor in the Pacific Northwest at this time of tariffs, squeezes on construction talent and interest rates that never seem to come down. Maurice Romming is the president of o' Neill Construction Group in Portland, Oregon. Thanks for joining us.

[Maurice Romming]

Well, thank you for having me, David. I appreciate it.

[David Brancaccio]

How is the economy in your part of the country doing?

[Maurice Romming]

It's extremely volatile. I think there's just a number of things that we have to factor in that we didn't have to factor in in the past. So I think one of the things we talked about prior was the labor workforce shortage and the logistics on basically getting the equipment and material due to Covid. That's all changed since last we talked.

[David Brancaccio]

Yeah, we had talked a little bit more broad brush about older skilled people in construction retiring out and trying to make a career in construction, which involves a lot of digital calculations, for instance, on screen stuff more attractive to younger people. But now there's a different type of pressure on the labor force here in 2025. Are you seeing it play out?

[Maurice Romming]

Right now? It's not so much the labor force, but all the different economic factors that are playing out. We had supply chain issues in the past. Now we have how the terrorists actually affect what we do, monetary policies as far as interest rates and the tax policies. That all those kind of play into our decision making that we're going through right now.

[David Brancaccio]

Maurice, as you look out to the fall, what do you need to know before you could hire more? I mean, what would make your ability to bring on more people an easier decision?

[Maurice Romming]

I think if there is more consistency on this is where it's going to be and it's going to be there for at least a few years. That helps us better to plan our projects. Now having that consistency, you know, I kind of tease and say I could rather go to Vegas and gamble there. At least I'll lose my money, but I'll have fun doing it here. There's so much risk that we are faced with. It's a hard decision to actually honestly look someone and say, yes, these numbers are going to maintain for a period of time and they need that for to be able to go to the bank and get the loans. You know, in a sense I feel like I'm a builder, but now I'm also an economist where I'm trying to figure out all these different other factors that impact the way we do work. There's so many different things that we're concentrating on outside of just building the buildings.

[David Brancaccio]

Maurice Romming is the president of O' Neill Construction Group in Portland, Oregon. Mr. Roming, thank you for this.

[Maurice Romming]

Thank you, David, for having me.

[David Brancaccio]

And in Los Angeles, I'm David Brancaccio. It's the Marketplace Morning report from APM American Public Media.

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