The news: Affirm released a bevy of data regarding its user base and loans in a letter addressed to senators.

• 69% of Affirm customers’ FICO scores were near prime, prime, or superprime—by comparison, its buy now, pay later (BNPL) industry average hovers at 35%, per data from the Consumer Financial Protection Bureau.
• Millennials dominate Affirm’s services, representing 44% of its customer base, while Gen Zers represent the fastest growing demographic, at 27% YoY.
• And average household income was $73,000, with households making over $60,000 comprising the majority of Affirm’s patrons.

Why this matters: Affirm’s data drop gives a deeper view of BNPL consumer demographics, and more specifically, a clear profile of Affirm’s consumer base. 

• With the majority of Affirm’s customers holding near prime, prime, or superprime FICO scores and middle to upper-middle class incomes, Affirm’s loans appear to service a young, financial stable population looking for the benefits of breaking up the cost of higher-ticket items or services over multiple paychecks. 
• But this doesn’t erase the fact that Affirm still lends to more financially precarious brackets: nearly one-third of its users slip into FICO scores of 619 or lower. 

Other BNPL providers seem to be dipping much deeper into the subprime well, servicing  more fragile consumers, per the CFPB. These consumers are more likely relying on BNPL to buy essentials like groceries or for lower-ticket items like DoorDash as they find themselves boxed out of access to credit cards.

Our take: Affirm’s data suggests a tiered system may be emerging in BNPL, where different providers are serving different slices of creditworthy customers.

However, the income range of US adults seeking BNPL loans demonstrates widespread popularity of alternate credit, a key concern for issuers who risk losing credit card customers to these alternative loans. They need to address that risk with competitive, rewards-eligible card-linked installment loans.