BNPL vs Loan Apps: Which One Is Better for Your Credit Score?

In Nigeria today, many people are turning to digital borrowing, either through Buy Now, Pay Later (BNPL) options or loan apps. Both offer quick access to funds or products, but they impact your credit score differently. If you're trying to stay creditworthy while still meeting your financial needs, understanding how each one works is essential.

What Is BNPL?

Buy Now, Pay Later lets you purchase something like electronics or fashion items, and pay for it over time. With Oja by Tendar and other BNPL services in Nigeria, the full cost is split into smaller, scheduled payments, often with no interest. If you pay on time, your credit score remains healthy or can even improve, especially when the provider reports your good behavior to credit bureaus. BNPL also avoids the pressure of needing to pay upfront, which makes it appealing to people who want to manage their spending better without taking out a traditional loan.

What About Loan Apps?

Loan apps give you direct cash for emergencies or expenses. They can be fast and convenient, but can come with high interest rates and very short repayment windows. If you miss a payment or default, many of these apps report your behaviour to credit bureaus, and your score can drop quickly.

Some loan apps also engage in aggressive recovery tactics, such as calling your contacts or sending messages that can feel harassing. While not all apps behave this way, it's something to be cautious about when borrowing.

So, Which Is Safer for Your Credit Score?

BNPL may offer a gentler way to borrow, especially if you need to spread payments without the stress of interest or hidden charges. As long as you pay on time, you can avoid damage to your credit and even build a positive history.

Loan apps, while helpful in emergencies, come with more risk. Missed payments show up fast on your credit profile and may take longer to recover from. Both BNPL and loan apps have their place, however, BNPL is generally easier to manage if your goal is to keep your credit score strong. Whatever you choose, always check if the provider reports to credit bureaus and understand the terms before committing.

Need help keeping track of your credit score?
Scorewise helps you track your credit score and is available on the App Store or Google Play Store.