Fair Issac at the request of the banks is changing it ways. Banks want to boost lending volumes by increasing loan originations to borrowers who otherwise would not qualify, therefore a new FICO score is being created that will incorporate new datasets that will help determine the credit worthiness of those without a credit score. These new datasets include cable, cellphone, electric and gas bills.
The new score, which isn’t yet named, will be calculated based on consumers’ payment history with their cable, cellphone, electric and gas bills, as well as how often they change addresses and other factors, according to Fair Isaac, also known as FICO. Traditional FICO scores that lenders use in the approval or rejection process are calculated based on the information in the credit reports from the three major credit-reporting firms, Equifax Inc.,Experian PLC and TransUnion. The new score will instead pull data from a separate database of telecommunications and utilities providers maintained by Equifax. It also will incorporate data from a LexisNexis database, including how often people change addresses, with frequent changes suggesting less stability.