Klarna

[tumbletray]

Does Klarna just accept everyone first time? Won't let me use it again even tho I paid early lol

[roosnunlilei]

I have used it for a couple of years. It's a hit or a miss whether they let me though. Sometimes I can have a couple of hundred quid outstanding and they still let me add more, other times I owe nothing and it says no. It's absolutely mad crazy.

[ChanceNorman]

I read something today that said Klarna will be reporting to credit reference agencies from June.

It's something to be aware of - much like pay day loans it's probably going to be a quick way to kill a mortgage or loan application for many lenders.

[roosnunlilei]

When they first started with the 30 day pay later thing the business model was basically a changing room. The idea was you ordered both sizes/styles and you only paid for what you kept. I have their card now which can be used anywhere but I assume that would just be reported like a credit card, the only difference is it takes the payments individually 30 days later (or you can pay each one as and when you want before that)

[KoblinsGiss]

Please be very VERY careful about using these schemes. As this recent article from Martin Lewis at money saving expert shows Klarna is about to now report these uses to credit agencies like Experian etc and this may well kill off and dent prospects for mortgages and similar. No lender will enjoy lending to a person who either needs or tends to use these buy now pay later schemes.

[GiltEdges]

@ChanceNorman

I read something today that said Klarna will be reporting to credit reference agencies from June.

It's something to be aware of - much like pay day loans it's probably going to be a quick way to kill a mortgage or loan application for many lenders.

This.

[Metabigot]

Well that's a blow. I use Klarna a lot - often just to try before I buy so I'm not paying upfront for something I'm not keeping. Nothing to do with not being able to afford or pay back.

[KoblinsGiss]

@Metabigot

Well that's a blow. I use Klarna a lot - often just to try before I buy so I'm not paying upfront for something I'm not keeping. Nothing to do with not being able to afford or pay back.

But unfortunately credit agencies will see this and report this. And lenders who credit score you using their own often quite unknowable metrics (nothing to do with the “score” you see on a credit agency report) will interpret your BNPL schemes the way they wish to. You’ll need to work out another way to try before you buy presumably by using a credit card responsibly.

[Metabigot]

@KoblinsGiss

But unfortunately credit agencies will see this and report this. And lenders who credit score you using their own often quite unknowable metrics (nothing to do with the “score” you see on a credit agency report) will interpret your BNPL schemes the way they wish to. You’ll need to work out another way to try before you buy presumably by using a credit card responsibly.

But if I'm paying Klarna in time what will they be reporting?

[BarbaraofSeville]

@Metabigot

Well that's a blow. I use Klarna a lot - often just to try before I buy so I'm not paying upfront for something I'm not keeping. Nothing to do with not being able to afford or pay back.

Just use a credit card, the unwanted items will be refunded before you need to pay the bill and it will be viewed positively not negatively on your credit file.

Klarna seems to have been invented to solve a problem that doesn't exist and you're opting out of consumer protection as well as damaging your credit file in the eyes of lenders.

[GiltEdges]

But if I'm paying Klarna in time what will they be reporting?

They'll be reporting that your payments were made in time/up to date. That's not so much the issue, as that the use of Klarna itself may be looked upon less favourably by some lenders.

[KoblinsGiss]

there are two issues of interest to lenders here @Metabigot -

1. how regularly you pay off what you owe - whether credit card or klarna or X or Y. If you’re regular - then great. BUT
2. the second issue here is that you are recorded/seem to be needing Klarna (or any similar Buy Now Pay Later scheme). Your lender neither knows you personally nor your reasoning for using such schemes. What they see is an individual who is clearly repeatedly using Buy Now Pay Later. What the lender makes of that information is down to them and their risk appetites, but you can see two different issues here.

[Metabigot]

I'm presuming it's the same for things like Clearpay? The irony is I have loads of credit available on various credit cards I own but it's so easy to put something on the credit card and forget about it. The likes of Klarna and Clearpay the payments are all rescheduled and they send you reminders so you can't forget.

[KoblinsGiss]

Any Buy Now Pay Later scheme will say something to a lender. What the lender interprets of it is their business but it’s important to bear in mind.

credit card use - if indeed one is a regular payer offer - is far more responsible in a lender’s eyes, and you should set up pay off minimum payments monthly automatically on a chosen card and use that for your purchases if you need to “buy now and pay later”.

[Metabigot]

@KoblinsGiss

Any Buy Now Pay Later scheme will say something to a lender. What the lender interprets of it is their business but it’s important to bear in mind.

credit card use - if indeed one is a regular payer offer - is far more responsible in a lender’s eyes, and you should set up pay off minimum payments monthly automatically on a chosen card and use that for your purchases if you need to “buy now and pay later”.

I do that but it's so much easier when the payments for a particular item are all rescheduled. I cba to keep track of what I buy so klarna and clearpay do that for me.. it's actually a much more responsible way of using credit than whopping it all on the credit card in my opinion - now that really is a buy now pay 'later' (later as in never) but with Klarna and Clearpay you can't just forget about it.

I'm not sure there's evidence that lenders will view bnpl unfavourably if all payments made on time etc but it's a bit of an unknown quantity at the moment .

I'm not massively after credit at the moment but am considering a lease car later in the year (linked to work so payments taken from my pay at source which may make a differnece in terms of lender risk)