Starting September 30 Klarna will begin sharing loan and repayment activity for our Term Loan product in the US with the credit bureau TransUnion. This information will only be visible to you and will not impact your credit score at this time.
This means purchases you make starting September 30 using Klarna Term Loan, including repayment activity, will become visible to you on your credit file held by TransUnion.
What actions will not be shared with the credit bureaus?
- Creating a Klarna account
- Pay in 4 payments
- Pay Later in 30 Days payments
- Pay now payments
What actions may be shared with credit bureaus?
- Applying for a Term Loan
- Entering into a Term Loan
- On-time payments on Term Loan loans
- Overdue payments on Term Loan loans
- Defaults on Term Loan loans
When does this come into effect?
We will begin sharing data on Term Loans opened after September 30. This means:
- Any loans fully paid off before September 30, 2024 will not be shared with TransUnion.
- Any loans taken out before 30 September, 2024 and still being repaid after 30 September will not be shared with TransUnion.
- Any loans taken out on or after September 30, 2024 will be shared with TransUnion but will only be visible to you at this point.
These loans will become visible in your TransUnion credit file from the first week of November.
How will the changes affect my credit history and Vantage / FICO score?
The data we share with TransUnion will have no impact on your FICO / Vantage score and will only be visible to you at this time. In the future, term loan reporting may impact your score and certain lenders may also be able to see your payment performance on these loans.
What is a Credit bureau?
A credit bureau is an independent organization that maintains information about consumers’ use of credit products and reports that information back to lenders and others. The information includes applications for credit – such as if a consumer has applied for a credit card recently; current credit status – for example if a consumer currently owes money to a financial institution; and financial behavior, which includes whether the consumer regularly pays their bills on time.
There are three main credit reporting agencies in the US: Experian, TransUnion and Equifax.
How can I access my TransUnion credit report?
Consumers can access their report here.
Which products does this apply to?
This applies to Klarna Term Loan.
I thought Klarna didn’t agree with reporting to credit bureaus?
Klarna supports the principle of sharing data with credit bureaus, and we do share data with bureaus in many countries, including the UK.
We do not share data on our Pay in 4 product in the US. The current US credit information system is still in the process of building new risk models to incorporate this unique, shorter-term credit product with the goal of ensuring appropriate consumer outcomes.
Term Loan is a longer-term loan, closer to the more traditional credit products which credit bureaus are used to processing.
Why is Klarna doing this?
Klarna is committed to transparency and empowering consumers, providing them with clear tools to track their spending. This partnership with TransUnion is another step in that direction.
We would like to get to the point where you see the benefit of your on time payments in your credit score. Most Klarna customers repay their loans on time, and we believe they should receive credit for it.
During this early phase, we're working through any potential issues to ensure that Term Loan data is accurately reflected before impacting consumers’ credit scores. We understand the importance of credit scores and want to ensure both Klarna and TransUnion get it right.