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Does Klarna Affect Your Credit Score?
July 1, 2025
Quick Answers
Most of Klarna’s short-term payment plans involve a soft credit check, which does not impact your credit score, but applying for longer-term financing may result in a hard inquiry that can.
Your payment history for certain financing plans may be reported to credit bureaus, meaning on-time payments can help build credit while missed payments will likely harm it.
Failure to pay can lead to your account being sent to collections, a significant negative event that will almost certainly lower your credit score.
What Is Klarna?
Klarna is a financial technology company that offers "buy now, pay later" (BNPL) services for consumers. This platform allows shoppers to split the cost of their purchases into a series of smaller, often interest-free, installments. It is typically presented as a payment option during the checkout process at a wide range of online and physical stores.
How Klarna affects a user's credit score depends on the specific payment plan selected and their payment history. While some on-time payments may be reported to credit bureaus, missed payments are more likely to be reported and can negatively impact a credit score. Therefore, users should understand the terms of their plan to manage their financial health effectively.
How Klarna Could Affect Your Credit Score
Using Klarna can be convenient, but it's wise to understand its potential impact on your credit. While responsible use may not harm your score, missed payments can create a negative record.
- Initial Application: When you opt for certain Klarna payment plans, especially longer-term financing, the company may perform a soft credit inquiry. This initial check does not lower your credit score.
- Payment History Reporting: For some of its financing products, Klarna reports your payment activity to credit bureaus like Experian or TransUnion. Consistent, on-time payments can positively influence your credit history over time.
- Missed Payments: If you miss a payment, you will likely incur a late fee from Klarna. At this stage, your credit score is not typically affected, but it marks the beginning of a potential problem.
- Delinquency and Reporting: Should you fail to make payments for an extended period, Klarna may report the delinquent account to the credit bureaus. A late payment record can directly lower your credit score.
- Collections: If the debt remains unpaid after multiple notices, Klarna may sell the debt to a collection agency. A collections account is a serious negative mark that can significantly damage your credit score for several years.
How Much Will Klarna Affect Your Credit Score?
The extent to which Klarna impacts your credit score depends on the specific payment plan you choose and your payment behavior. Here are a few key things to consider.
- Type of financing. Klarna’s longer-term financing plans are more likely to be reported to credit bureaus. Shorter "Pay in 4" plans typically do not affect your credit score if you pay on time.
- Payment history. Making timely payments on reported Klarna loans can positively influence your credit history. Conversely, late or missed payments can result in negative marks on your credit report, lowering your score.
- Credit inquiries. Applying for Klarna's financing options may result in a hard credit check, which can temporarily lower your score. Their "Pay in 4" option usually only requires a soft inquiry with no impact.
How You Can Avoid Klarna Affecting Your Credit Score
Make Timely Payments
The most direct way to protect your credit is to pay your Klarna installments on time. Late payments on financing plans can be reported to credit bureaus, which may negatively impact your score. Consider setting up reminders or autopay to ensure you never miss a due date.
Understand Payment Options
Klarna’s "Pay in 4" option typically uses a soft credit check, which doesn't affect your score. Longer-term financing, however, may require a hard inquiry that can have a temporary negative impact. Be mindful of which payment plan you select at checkout to avoid surprises.
Limit Financing Applications
Applying for Klarna's longer-term financing can trigger a hard credit check. An excess of hard inquiries in a short time can lower your credit score. To minimize this, only apply for new financing plans when you truly need them and can manage the payments.
Choose the Right Card to Klarna
No matter your starting point, improving your credit score is an achievable goal that pays dividends for your overall financial health. Consistent, positive financial habits can lead to meaningful changes in as little as three to six months.
- Monitor your credit reports regularly. Obtain free reports from all three major bureaus to identify and dispute inaccuracies or detect signs of identity theft that could be harming your score.
- Establish automatic bill payments. Your payment history is the most significant factor in your score, so setting up automatic payments ensures you never miss a due date.
- Reduce your credit utilization ratio. Aim to keep your balance below 30% of your total available credit, as high utilization can negatively impact your score.
- Become an authorized user. Being added to a credit card account with a long, positive history can help improve your score by association.
- Limit hard inquiries. Avoid applying for too much new credit at once, and when rate shopping for a loan, do so within a short time frame to minimize the impact on your score.
The Bottom Line
Klarna's effect on your credit score depends on your payment behavior. Late payments can result in negative reporting, while some financing options may report your on-time payments to credit bureaus.
Frequently Asked Questions
Does using Klarna always involve a credit check?
Not always. Klarna performs a soft credit check for its "Pay in 4" and "Pay in 30" plans, which does not impact your credit score.
Can Klarna help me build my credit score?
Yes, it can. Klarna reports on-time payments for some of its financing options to credit bureaus, which can help you build a positive payment history.
What happens if I miss a Klarna payment?
Missing a payment may result in late fees. If payments are significantly overdue, Klarna may report this delinquency to credit bureaus, potentially lowering your credit score.
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