It's the Brian Lairn Show on WNYC. I'm Bridget Berg and filling in for Brian today.

Now we'll talk about a major shift in how credit scores are calculated, one that could affect millions of

Americans. FICO, the company behind the credit score used by 90% of U.S. lenders, recently announced

it will begin factoring in, buy-now, pay-later loan history when calculating your score.

These loans, which let shopper split payments into smaller installments, have become a

popular alternative to credit scores, especially among younger adults, excuse me, credit cards. These

loans are currently not reflected in your credit score, leaving lenders with no visibility into how

much debt borrowers have accumulated through payment plans.

But starting this fall, that changes.

Two of FICO's most widely used scoring models will begin incorporating this repayment data.

That means a buy-now pay-later loan could help build or hurt your credit score.

Joining us now is Amani Moise, personal economics reporter at the Wall Street Journal.

Amani, welcome to WNYC.

Hey, Amani.

Are you there?

Great.

I'm here.

Sorry about that. So Amani,, for our listeners who might not be

familiar, how do by now pay later loans work?

They are different from, I guess, traditional credit because they're really only offered

at the point of sale. And they're mostly offered online, even though there are some companies launching things

like find out pay later cards, which you could actually use a brick and mortar.

...