New FICO Score Will Account for Utilities Payments and More
Are you familiar with your FICO score?
While some people stay current with their score, as they understand how this impacts their finances, others never take the time to see where they stand.
According to multiple outlets, FICO has already rolled out a new scoring formula. By doing so, it hopes to assist high-risk consumers access credit.
Before we get into the finer details of the new scoring system, it is important to understand how your FICO scores impacts your finances. In short, the higher your score the easier it is to secure credit, which includes a variety of loans. Furthermore, a higher score means a lower interest rate on loans, thus saving you money.
Sure, there are bad credit car loans available to those with a less than desirable FICO score, but wouldn’t it be nice if you never had to concern yourself with this?
The New FICO Score
Moving forward, the new FICO score will take into consideration payment history on things such as utility bills, cable bills, and mobile phone plans.
While it is hard to say for sure, the new FICO score may have already impacted you. To date, FICO is working with 12 credit card issuers, all of which have used the new score as a means of making lending decisions.
By the end of 2015, the score is expected to reach a national scale.
What we don’t know is this: how the score will impact current credit scores, as well as how it will be used in making lending decisions.
It is hard to say what the exact impact will be, but so far it appears that the new FICO score will provide credit access to more than 50 million consumers who do not currently have credit reports or scores.
For those who were previously “unscoreable,” this could bring potential benefits to their life.
Even with the new FICO scoring system in place, there will always be people who have bad credit.
As a result, they will search for bad credit car loans and other ways of working around the system.