Most buyers assume that a clean credit file and a healthy Experian score mean smooth sailing for a mortgage application. Unfortunately, Santander’s latest update revealed that this isn’t always the case.
The Unspoken Issue: Buy Now, Pay Later (BNPL)
Services such as Klarna and other “buy now, pay later” providers are quietly reshaping how banks assess creditworthiness. While these products don’t always show as negative marks on your credit file, lenders like Santander consider them within their internal credit-scoring systems.
Even when payments are made on time, regular use of BNPL can signal financial overstretch or a reliance on short-term borrowing. That, in turn, may reduce your credit score within the bank’s own system, even if external reports look perfect.
How to Reduce the Impact
- Pay off all BNPL balances in full and avoid new purchases before applying for a mortgage.
- Build your deposit. A lower loan-to-value (LTV) ratio can offset minor credit concerns.
Demonstrate stability through regular income and responsible credit use elsewhere.
The Takeaway
It’s a reminder that your credit score is only part of the picture. Lenders look beyond the numbers, and subtle patterns, like the use of short-term credit, can make all the difference.
If in doubt, speak to an adviser before applying. They can identify potential red flags and recommend the best lender for your situation.
Speak to a Mortgage Adviser
Investing in the property market has always been and continues to be a great way to invest your money and build your wealth. If you are looking to purchase a property, and need to discuss your mortgage options, please feel free to contact our team of mortgage experts at Oportfolio Mortgages, today.
