Does Klarna Affect Credit Score?

Does Klarna affect your credit score? Learn how Buy Now, Pay Later works, when it may impact your credit file, and how it compares to using a credit card.

Written by Hayley Bevan and Jide Davies

Published: 19/03/26Published on March 19th, 2026

Last reviewed: 19/03/26Last reviewed on March 19th, 2026

6 mins read

Buy now, pay later (BNPL) services, such as Klarna, are a popular way to split purchases into short-term, interest-free instalments at checkout.

But as convenient as it might be to spread the cost of your spending, BNPL schemes can still affect your credit score, overall credit health, and ability to secure future financial products.

As with other types of borrowing, BNPL schemes might check your credit score which can potentially lower it. For Klarna, this usually only applies with longer-term financial products where a hard inquiry might be performed to determine your creditworthiness.

In this guide, we’ll walk you through how Klarna works, whether it can build your credit score, what happens if you miss a payment, and compare BNPL services to credit card options.

What is Klarna and how does it work?

Klarna is a BNPL service which gives you options to spread the cost of spending. Its three main payment options include:

1. Pay in 3 where you can split the overall cost into three interest-free instalments within 60 days.
2. Pay in 30 where you can settle the full amount of your purchase(s) within 30 days.
3. Longer-term finance allowing you to spread payments over a longer period (often with interest).

Where some options will only require a soft credit check (which can’t be seen by other lenders), longer-term financing may involve a hard inquiry which is marked on your credit report and could temporarily lower your credit score.
Depending on the product and current reporting rules, Klarna might report you to a credit reference agency for missing a payment which can show up on your credit report.
For that reason, it’s always best to demonstrate responsible borrowing behaviour by staying on top of repayments. Not only to protect your credit health, but to slowly build your credit score.

Does Klarna build or improve your credit score?

Like other financial products such as a credit card, Klarna can slowly build and improve your score, provided it’s used responsibly and payments are made on time.

That said, short-term BNPL products don’t work like traditional credit, meaning on-time payments may not significantly boost your score to the level you might associate with other forms of borrowing.

As with other types of lending options, BNPL schemes such as Klarna also carry risk if they’re not used responsibly, with missed payments potentially leading to debt collection or a county court judgement (CCJ) marked on your credit file.

With whichever financial product you choose – be it BNPL, loan, or credit card – how long it takes to build your credit score requires consistent on-time payments, low credit use, and long-standing accounts.

Pros and cons of using Klarna and other BNPL schemes

Pros:

• Interest-free payments (if repayments are made on time)
• Get items now without making upfront payments
• Quick and easy at checkout
• Many short-term options use soft credit checks
• Predictable payment amounts

Cons:

• Easy to overspend by making multiple purchases
• Missed payments can affect your credit score
• Limited long-term credit-building benefits
• Possible late fees and account restrictions
• Can complicate the returns process

What happens if you miss a Klarna payment?

Missing a Klarna payment will typically trigger the following process. For that reason, it’s important you make payments on time and only borrow what you can comfortably afford to repay.

1. Payment reminder notifications

If you miss a payment on the scheduled date, Klarna will send you a reminder. If your outstanding balance is left unpaid, it will get added to the next scheduled payment (potentially with interest).

2. Possible late fees

Depending on the product terms, you might incur late fees for missed payments. For that reason, be sure to settle your balance on time by setting up payment reminders or automatic payments.

3. Account restrictions

Should your outstanding balance continue to go unpaid, Klarna might impose account restrictions meaning you can’t use their services to purchase other products.

4. Potential reporting to credit reference agencies

If you pay late, Klarna might report your balance as overdue to credit reference agencies which can affect your credit score and ability to secure future financial products.

5. Possibility of debt collection

As with other types of overdue balances built up through lending, it’s possible your debt might be passed to a debt collection agency for recovery which can further harm your credit score.

Defaults can remain on your credit report for up to six years in the UK. So, if you have a bad credit score or are struggling to manage your finances, it’s a smart move to seek professional financial advice.

Klarna vs credit cards: Which is better for building credit?

Klarna (Buy now, pay later)

Interest: Often 0% short term

Credit building: Limited

Reporting to credit agencies: Varies by product

Flexibility: Fixed instalments

Consumer protection: Varies

Credit Card

Interest: May apply if balance not cleared

Credit building: Stronger long-term impact if managed well

Reporting to credit agencies: Yes

Flexibility: Flexible repayments (min. payment required)

Consumer protection: Section 75 protection (for eligible purchases over £100)

With either option, you should prioritise making payments on time to protect and rebuild your credit score. With a credit card, you should also stay well within your credit utilisation ratio and not be tempted to overspend.

For example, if you have a credit limit of £1,000, you should aim for a ratio below 30% by retaining a balance no higher than £300. Should your ratio continually exceed this amount, lenders might infer you’re dependent on credit and a higher risk for lending.

With a credit card, lenders will also regularly report payments to credit reference agencies which protects your score and builds a consistent repayment history. You’ll also benefit from clear credit limits which makes it easier to manage your finances.

Depending on the product you choose and whether you pay on time, Klarna (and other BNPL schemes) can affect your credit score.

For that reason, the question isn’t whether Klarna is good or bad for credit. It’s more a case of how it’s used and whether you can comfortably commit to making repayments on time.

If your priority is long-term credit growth, then structured credit products (such as a credit card) usually have a bigger impact provided payments are made on time and you maintain a sensible credit utilisation ratio.

But with whichever option you choose (be it BNPL or a credit card), it’s wise to do your research to make an informed decision that fits your financial situation. Not just for now, but for long into the future.

Representative 39.9% APR (variable) on Aqua Classic

Contributors

Hayley Bevan

Hayley is an editor at Aqua.

Read more from Hayley Bevan

Jide Davies

Jide is Head of New Lending at Aqua.

Read more from Jide Davies