FICO is planning a change in credit score calculations to include the management of checking and savings accounts, potentially helping thousands of borrowers.
FICO, along with Experian and
A statement from the company said that with the customer’s permission, the score will consider the length of time checking and savings accounts have been open, the frequency of activity and evidence of savings, which can be electronically read by
That will be combined with consumer credit information from Experian to provide what the companies are calling an enhanced view of positive financial behavior.
The statement said that consumers new to credit or with limited history, along with those with previous financial distress that are getting back on their feet, will benefit the most from the changes.
“This changes the whole dynamic of the lender and customer relationship,” Jim Wehmann, executive vice president at FICO, said in the statement. “It empowers consumers to have greater control over the information that is being used in making credit risk decisions. It also enables a deeper dialogue between the consumer and lenders to help both parties make better financial decisions. It’s a game changer.”
Some 58.2 percent of those with credit scores have a score of 700 or higher, but experts believe that pool of borrowers are largely tapped out. Lenders have asked for other ways to identify more creditworthy borrowers without increasing their risk by dipping into the subprime rankings.