Monday, April 20, 2015

New Credit Score Could Open Up FICO Scoring to 53 Million+ Borrowers

Fair Isaac Corp., the creator of FICO scoring, announced a new score they are developing that is intended to make millions of additional people credit worthy. Credit reporting giant Equifax and Lexis Nexis Risk Solutions are providing alternative data to include utility bill, cable bill and cell phone bill payment information.  This former “alternative credit” information now will have the potential of contributing to a credit report that could open up FICO scoring to more than 53 million additional potential borrowers who, for various reasons, have not previously been mainline users of credit, and thus, do not have a FICO score.  In the world of mortgage lending, no FICO score means no mortgage.

Fair Isaacs has partnered with 15 of the top US credit card issuers to agree to issue credit cards, based on the alternative credit score.  If the users don’t exceed card credit limits and pay as agree for only 6 months, they will then receive a standard FICO score.

This mortgage banker will watch the metamorphosis of the new FICO score, with great interest, to see just how accepting FHA, VA, Fannie Mae and Freddie Mac will be of this new “credit report”.


Forget about the congressional uproar over 3% down vs. 3.5% down payments.  This manipulation of the, up to now, sacred FICO score could dramatically skew credit assessment as well as risk analysis.

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