Shares of Affirm Holdings, Inc. (NASDAQ: AFRM) surged 5.04% in intraday trading on Tuesday following the announcement of a significant expansion in 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. This development is seen as a step towards making Affirm's financial products more mainstream and could support more informed lending decisions in the future.
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, reports suggesting that Affirm plans to move its legal home out of Delaware have surfaced, though the impact of this potential change on the stock's performance remains unclear.
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