New from FICO

[divemedic]

They have a new scoring model called a "FICO Expansion" score. Anyone know anything about this?

http://www.fairisaac.com/fairisaac

[J_Snow]

Theres a thread about it somewhere... maybe the OT board...

[dasani08810]

From what I understand about it, it's a scoring model for those with not much of a credit history. They include utilities, rent, and other types of recurring payment that, as of now, goes unreported.

I kinda doubt there'll be a big surgence of demand for those scores. They really don't include any real "lines of credit" that lenders really look for. Besides, I don't think utility companies, landlords, and such are really going to care to pay to report stuff. After all, they already can check your credit and their risk is minimal.

I mean, if you don't pay your rent, you get evicted...if you don't pay the electric bill, your TV doesn't work. It's not like these industries are extending lines of credit that will expose them to huge losses if one defaults. So, you don't pay the electric bill, they come and cut it off after a couple of months- they're out $500 until you get tired of sitting in the dark.

Everyone has to pay for housing and electric, so what will that score tell anyone? That you like watching TV in an apartment?

Now if FICO really wanted to make a change for the better, they would factor in "net worth" and "income" into their equations. Why does one have to suffer a lower score if he's $5000 in CC debt? If that person makes enough to pay it off in a month, then why is that amount a "risk"?

A person that makes 100k a year and has $5k in CC debt is "punished" just as much as someone that makes 20k a year and is 5k in CC debt.

I seems they are missing a HUGE part of their infamous and COSTLY formula.

JMHO