What is a FICO Expansion Score?

The FICO Expansion score is a new credit risk score from Fair Isaac designed specifically to help lenders extend credit to consumers in new markets.

The Credit Score for "Credit-Underserved" Consumers

The FICO Expansion score is a new credit risk score from Fair Isaac designed specifically to help lenders extend credit to consumers in new markets.

As many as 50 million consumers -- especially new immigrants, young people and women who have been recently divorced or widowed -- aren’t in the credit bureaus’ files because they lack traditional credit scores. As a result, they may find it difficult to establish their credit worthiness and may be shut out of today’s credit economy. They may have difficulty buying a house, obtaining a credit card or gaining approval for other financial transactions.

Traditionally, credit reporting agencies have not tracked or scored payments of commonly recurring bills such as rent, private mortgages, utilities, telephone, cable TV, child care and payday advances. But new measures of financial reliability may soon help those who lack a traditional credit score to establish a foothold in the mainstream, credit-driven economy.

FICO has developed the FICO Expansion score, which takes into account your broader financial history, not just your credit history. The new FICO Expansion Score is based on such things as:

- Deposit account records

- Payday loan repayments

- Purchase payment plan performance

- Other non-traditional credit data

 

Fair Isaac obtains the information from specialized credit bureaus and then uses it to come up with a FICO Expansion Score.

How FICO Expansion Scores Are Used

By using FICO Expansion score for these consumers - who include recent immigrants and young adults - businesses can make more financial services available to more people who have missed out on opportunities simply because they lack a traditional credit history.

FICO Expansion Score assesses the credit risk of consumers who have minimal or no traditional credit history on file by tapping non-traditional sources of consumer data, such as payment performance on deposit accounts, utility account history, and product purchase payment accounts.

Introduced in 2004, FICO Expansion Score has been used as a single tool or combined with other scores.

Lisa Nelson, vice president of Scoring at FICO, said "Our data sources provide information to calculate FICO Expansion Scores for 86% of underserved consumers, and 42% of them have proven to have good to excellent scores. These scores will help clients make better credit decisions by leveraging information that might otherwise not be considered."