Affirm Holdings, Inc. (NASDAQ: AFRM) saw its stock surge 5.09% in Tuesday's trading session following a significant announcement regarding the expansion of its credit reporting practices. The company, known for its "buy now, pay later" services, revealed plans to report all new pay-over-time loans to TransUnion (NYSE: TRU) starting May 1, 2025.
This strategic move by Affirm encompasses all of its pay-over-time products, including the popular Pay in 4 option and longer-term monthly installments. While the new reporting will not immediately impact credit scores, it lays the groundwork for potential inclusion in future credit scoring models. Libor Michalek, Affirm's President, stated, "Including all loans in a consumer's credit profile is a crucial step toward making Affirm's honest financial products even more mainstream."
Investors reacted positively to the news, viewing it as a sign of Affirm's commitment to transparency and responsible lending practices. The expansion of credit reporting could potentially broaden Affirm's customer base and strengthen its position in the competitive fintech market. Additionally, TransUnion's research suggests that this move could increase consumer adoption of buy now, pay later services, as 53% of non-users indicated they would be more likely to use such services if it had the potential to positively impact their credit scores.
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