MW Treat your credit score with the respect you would treat a lover

By Quentin Fottrell

FICO has said it will introduce 'buy now, pay later' loan data into its credit-scoring models

Changes are coming to your credit score.

Last month, FICO announced that it will introduce "buy now, pay later" loan data into its credit-scoring models; it's scheduled to happen in the fall of 2025. "BNPL loans are playing an increasingly important role in consumers' financial lives," Julie May, vice president and general manager of B2B Scores at FICO, said. "We're enabling lenders to more accurately evaluate credit readiness, especially for consumers whose first credit experience is through BNPL."

BNPL services like Uplift, Affirm, Uplift and Klarna have become increasingly popular, and customers are even being presented with BNPL options at checkout, usually four payments without paying interest. Tempting, isn't it? In fact, 15% of people said last year that they'd BNPL in the prior 12 months, according to a Federal Reserve survey, up from 14% in 2023 and 10% in 2021, when the Fed survey first asked about BNPL. Other polls put that figure at over 40%.

Treating your credit score with consistency is preferable to employing 'tricks.' It encourages fiscal responsibility.

I recently received a letter to my Moneyist column about credit scores and the changes, from a reader who wrote, "I love playing around with my credit score. Over the last 15 years or so, I've been using all kinds of different 'strategies' to tweak the score. It's fairly easy to do, assuming you have the cash/income to adjust balances on credit-card accounts. I don't really care about the score unless I need to get loans for certain projects or purchases. I find that it's fairly easy to boost my score at the time it's relevant."

Here's my takeaway to FICO and that reader letter: Treat your credit score with the respect you would treat a lover that needs a little love and care, not every now and then, but constantly, whether or not you have your eye on an attractive interest rate. Treating your credit score with consistency is preferable to employing "tricks." It promotes and encourages fiscally responsible behavior and, hopefully over time, good habits. Maintaining a high credit score over time is a sign of a responsible consumer.

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Tools of the trade

Good habits are better than 11th-hour strategies - and you can't gaslight credit-scoring companies into believing you're a good bet when your track record says otherwise. The former include keeping your balance low relative to your limit, paying your credit card and utility bills on time, and making sure the gym that you joined but never attended doesn't come after you with debt collectors. They're examples pulled out of a hat, but they are not so far fetched, and they give you an idea of what the credit-score gods can expect.

Worryingly, more people are using BNPL to buy essentials like groceries. In a survey released last month, LendingTree found that 25% of BNPL users said they've used the loans to buy groceries, up from 14% just a year ago, amid rising prices at the supermarket and elsewhere. What's more, one third of Generation Z who use BNPL say they've done so to buy groceries, making it their fourth-most common BNPL purchase after clothing, technology and home decor.

You can't gaslight credit-scoring companies into believing you're a good bet when your track record says otherwise.

Here are some tools of the trade for maintaining a high credit score: Take the time to actually read your credit report for any red flags weighing on your score (late or forgotten bills that might, for instance, be going to an old address). Some other rules of thumb: The older your credit, the better risk you are for lenders, so always cancel your newest cards first. Finally, prioritize canceling cards with hefty annual fees; if you're not using them, there's no point in paying them.

The three main credit bureaus - Equifax (EFX) , TransUnion $(TRU.UK)$ and Experian (UK:EXPN) - calculate their scores slightly differently, so a consumer's score would be dinged differently depending on the bureau. For instance, a FICO score has five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%). Like all credit bureaus, FICO values consumers who stay on top of their finances.

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Juggling too many cards

There are examples of good practice if you plan on taking out a large personal loan or mortgage. Say, you have too many cards and you're tired of managing them. If you already have a mortgage and you don't intend to take out a personal loan for the next six months or so, this is a good time to rid yourself of these cards once and for all. There are card closures that should take priority, once you have made sure that there is zero balance on those cards, and you have redeemed their points.

"Each time you apply for a credit card, a credit inquiry is added to your credit report," FICO says. "Although these credit inquiries don't usually significantly hurt your FICO score, they can lower it. Especially if you have many credit inquiries within a year. For that reason, consolidating your current balances to one card instead of two would be better. Credit inquiries can lower your score because people who are actively seeking credit have been proven to pose more risk to lenders than people who are not seeking credit."

This is not a good time to put things on credit, live the high life and treat your credit score like an afterthought.

While we're on the subject, I'm not a fan of juggling a lot of credit cards. They come with points, sure, but many also come with fees and the risk of losing them - and a higher risk of falling victim to a fraudster. I'm also not a proponent of opening cards for $100 bonuses only to close them afterwards. That's gaming the system and ends up costing the credit-card companies money, which is ultimately passed onto the consumer. Opening and closing credit cards can also damage your credit score, per this warning from FICO $(FICO)$.

This is not a good time to put things on credit and pretend that you're a flashy customer who can live the high life and treat your credit score like an afterthought. Shoppers are concerned about the economic climate. Consumer confidence suffered a decline last month, dropping to 93 from 98.4 in the previous month, according to the Conference Board's index. Personal consumption in May surprised analysts, falling by 0.1% after a 0.2% gain in April. People are worried about tariff-induced price hikes and the outlook for the jobs market.

Don't take your credit score for granted, but you don't have to play games with it either.

Previous columns by Quentin Fottrell:

Is now a good time to buy an iPhone?

Recession signs are out of control. When will it end?

What on Earth is going on with the American consumer?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter.

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-Quentin Fottrell

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July 14, 2025 08:38 ET (12:38 GMT)

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