FICO pilot holds promise for auto financing
The outcomes of a pilot system between Fair Isaac Corp. and 12 large credit card firms could ultimately help car dealers get car loans approved for alleged slim documents -- that's, clients with small or no credit credit rating.
Fair Isaac, better called FICO, is analyzing credit scores created by "non-conventional" payment histories, including paying cell phone and utility statements, which historically did not display up in credit scores.
FICO claims the brand new credit ratings, using information from lexis-nexis and Equifax, might supply credit scores for 15-million slim documents.
Jeff Scott, a spokesman for FICO, informed Automotive News the brand new scores could supply an "on ramp" to credit. The possible advantages to vehicle lenders and car dealers are likely down the street, he mentioned.
"Individuals who do not have regular FICO Scores might be capable to receive a rating based on the substitute information," he wrote in an e-mail. "This will help individuals get access to credit goods, including charge cards. Following a man has a bank card, they may be prone to get a normal FICO Score within six months."
FICO, of San Jose, California, expects to make the new credit scores accessible to more lenders after this year.
VantageScore Solutions of Stamford, Conn., a FICO competition, is also operating on putting credit scores to slim documents.
Analyzers say lenders are ready to fix the issue of thin files due to the growing purchasing-power of millennials, customers produced in the eighties and 1990s. Many millennials have not established credit however through the purchase of a house or car, but most of them probably have a cell phone.
It's possible for you to reach Jim Henry at [email protected]
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