MINNEAPOLIS -- Fair Isaac Corporation said that a recent study has found that its FICO Expansion alternative credit score tool can help lenders judge the credit worthiness of applicants who have no other credit history.
"Industry results clearly show that FICO Expansion score enables U.S. lenders to confidently assess the credit risk of nearly 50 million Americans who have little or no credit information on file at the major credit reporting agencies," said Ron Totaro, vice president of Global Scoring Solutions for Fair Isaac.
"This study demonstrates that FICO Expansion score delivers the same caliber of highly predictive, objective risk evaluation for these credit-underserved consumers that businesses have come to expect from all our FICO scores," he said.
Credit card companies HSBC and First Premier took part in the study, along with auto lenders and mortgage lenders.
FICO Expansion score taps nontraditional sources of consumer data not found at the national credit reporting agencies in order to assess the credit risk of adults who have minimal or no credit history on file. 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.