The FICO Expansion score is a credit risk score developed by the Fair Isaac Company specifically to help lenders determine the credit worthiness of consumers with insufficient credit histories. The score predicts how likely a consumer will become delinquent in the 24 months following the analysis by evaluating financial relationships, usually absent in credit bureau reports.
FICO Expansion scores use uncommon sources of financial data – including pay day loans and purchase payment plan (lease to own) performance – in order to provide a complete view of the consumer’s credit risk. Fair Isaac has selected the best commercially available data sources to power the score.
Approximately one-fourth of all adult U.S. consumers, roughly 50 million individuals, either lack credit reports entirely or have credit reports with too little information to make a good prediction of credit risk. This group includes immigrants, young adults and people who are recently divorced or widowed.
Similarities and differences between a traditional credit score and the expansion score include:
• Like traditional FICO scores, the Expansion score ranges from 300 to 850.
• The Expansion score is a credit risk score based upon non-traditional consumer credit data (in other words, not based on data from the major national credit bureaus: TransUnion, Equifax and Experian).
• The same logic behind traditional FICO scores applies, meaning that the higher the score a consumer earns the lower a risk they are to lenders.
• As with traditional credit scores, consumers turned down for credit based on the Expansion scores will be able to get a copy of their credit report, which they can challenge or take steps to improve. Up to five reason statements, provided with every score, indicate why the consumer failed to score higher, helping lenders better communicate with their customers.
Whether you have credit or not, paying bills on time, keeping your checking account in good standing and being responsible with your finances provides its own benefits to consumers.
DMCC is a 501 (c)3 is a charitable organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with their debt. Education is provided free of charge to consumers as well as personal counseling to identify the best options for the repayment of any unsecured debt. To speak to a certified credit counselor, call 1-954-418-1466, email contact@dmcconline.org.
DMCC is located at 700 West Hillsboro Blvd., Building 1, Suite 105, Deerfield Beach, FL 33441.
