New Credit Score Models May Help Consumers with Little Credit History

The NY Times Money Adviser has a report on new credit scoring models that rely on such data as rent and cellphone payments not used in traditional score models. The idea is to help lenders find consumers who are credit-worthy who may not have established credit histories.

About 45 million Americans lack traditional credit files. These consumers may have never had a credit card or they may have had financial difficulties and stopped using credit resulting in spotty credit histories.  Many lenders will not lend to people with credit scores of under 620; alternative data might improve their scores.

FICO recently introduced FICO Score XD, which uses data like cellphone and cable payments along with public data like property records. TransUnion began offering a scoring model that incorporates consumers’ checking account histories and how often they change home addresses. TransUnion said over a 100 auto finance companies and credit card companies are using or testing the new scoring models.


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