MoneyMe , an Australia-based digital lender and non-bank challenger, has launched a credit score product that intrigued 37,000 customers try the Beta Trial. It was released in response to a Treasury options paper that proposed adding Buy Now, Pay Later (BNPL) products to the credit reporting framework.

MoneyMe claims that greater transparency will improve responsible lending practices, improve the accuracy of credit assessments, eliminate the 'blind spot' in credit reporting caused by the exclusion of BNPL, and level the playing field in the sector. The MoneyMe app provides access to the MoneyMe Credit Score product. The credit file data is based on information from Experian, a global credit reporting firm, and was developed using MoneyMe's Horizon proprietary technology platform.

Through it, users can monitor how their score is changing over time, check their credit score for free (without influencing it), discover what information is on their credit file and how it affects their score, and determine their likelihood of being approved for one of MoneyMe's credit products. Customers of MoneyMe's beta product who responded to a survey said that 94% of them thought that knowing their score and understanding how to increase it was helpful, and 40% thought it was 'very' helpful. BNPL vs credit scores In order to safeguard consumers, accurate and thorough credit reporting enables lenders to make more precise loan decisions.

Treasury is attempting to make use of the current regulatory framework to create a system that enhances consumer safeguards, discourages regulatory avoidance, and is adaptable enough to allow new players to enter the BNPL market. If BNPL is included in the credit reporting regime as suggested in Treasury's options paper, MoneyMe is also advising BNPL users with numerous accounts to learn how BNPL may affect their credit ratings. Some of the changes Treasury suggests would also level the playing field for the sector.

Similar onboarding criteria to other credit products would affect how easily users may obtain BNPL, which could cause them to switch back to credit cards instead. With this benefit gone, it would also be less appealing for businesses to accept it at the point of sale because credit card merchant fees are frequently less expensive. BNPL habits According to MoneyMe, the present credit reporting gap has also kept many Australian consumers unaware of their real financial situation.

Customer data shows a notable crossover between the age group utilising BNPL the most and the age group checking their credit scores the most. The Reserve Bank announced that there were 7 million active BNPL accounts in Australia in the 2021–2022 fiscal year, a 37% rise from the year prior. The bulk of these consumers, who averaged 16.

6 BNPL transactions annually and totaled over USD 16 billion in transactions, were between the ages of 18 and 34. The majority (53%) of users of MoneyMe's new credit score service are likewise in this age range. Therefore, MoneyMe advises BNPL customers and other Australian consumers to get a solid awareness of how their spending patterns may affect their credit score and capacity to access loans in the future.

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