Affirm Holdings, Inc. (NASDAQ: AFRM) saw its stock surge 9.68% in pre-market trading on Wednesday, significantly outpacing its previous day's gain of 5.09%. The dramatic upswing comes in response to the company's announcement of a major expansion in its credit reporting practices, which has sparked enthusiasm among investors.

On Tuesday, Affirm revealed plans to report all new pay-over-time loans to TransUnion (NYSE: TRU) beginning May 1, 2025. This comprehensive reporting will cover all of Affirm's pay-over-time products, including the popular Pay in 4 option and longer-term monthly installments. While the new reporting won't immediately impact credit scores, it lays the groundwork for potential inclusion in future credit scoring models, signaling a shift towards greater financial transparency in the buy now, pay later (BNPL) sector.

Investors are reacting positively to this strategic move, viewing it as a testament to Affirm's commitment to responsible lending practices and long-term growth. The expanded credit reporting could potentially broaden Affirm's customer base and strengthen its competitive position in the fintech market. Moreover, TransUnion's research suggests this initiative could drive increased adoption of BNPL services, with 53% of non-users indicating they would be more likely to use such services if it could positively impact their credit scores. As Affirm positions itself at the forefront of this trend, the market appears optimistic about the company's future prospects and revenue potential.