New Opportunity for Bad and No Credit Owners

03/14/2008
No Credit History

Your credit rating is the inviolable sanctuary of your financial life. Your good credit score open the doors of all creditors for you. You can qualify for any credit card or loan with favorable terms, which helps you to save thousands of dollars. Well, there is no point in talking much about great importance of your credit rating. It is just the talk of the town.

The question of building or re-establishing your credit score is much more acute. Today you can find a lot of information on improving your credit score on the Internet. However, all tips are, generally, the same. What are they?

Pay your bills on time and in full, do not be late or miss your credit card payments, do not apply for too many credit cards, do not close several accounts at a time - all of them are quite common things that every reasonable credit card holder is well aware of. But what if you just have no opportunity to pay off your balances in full or just cannot get approved for a credit card you want? Is there another approach to building a good credit score?

The Fair Isaac Corporation has designed a new non-traditional method of establishing credit rating. They have created the so-called Expansion score that enables you to qualify for credit products, even if you get rejected by credit card companies. This score is based not on your credit history, but on the information about your utility and rent payments.

Card holders with no credit score are usually advised to get a pre-paid or a secured credit card. But with this new development from Fair Isaac bad or no credit owners have an alternative. The Expansion score makes credit products available for such customers.

Actually, this innovation is a windfall for both - credit consumers with bad or no credit history and for lenders, too. Well, the benefits of young people who want to start building their credit history, and those who have gone through some hard times with their money matters, are quite clear. They get access to credit cards and loans without a credit file. But what profit can creditors make from that?

Since the competition on the credit card market is really keen, it gets even harder day by day for card issuers to get new customers. But the companies look for reliable clients. And the credit consumer with some information that characterizes him or her as a creditworthy customer is much better that approving a client without any payment data at all.

In order to make the access to your Expansion score information available, FICO has launched a web site. There you can enter your data on rental, utility, and phone payments into a web file. All payments there are verified. This way you create your alternative online credit (or better to say, payment) report, and you, and credit card issuers as well have an access to this file.

According to the statistics, about 50 million American cannot get a regular FICO score due to some circumstances. The Expansion score gives a chance to these people to enter the world of credit. Some time later we will see if this invention proves to be a success.

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Comments

Freak on a Leash, 06:56 AM, March 28, 2008
I actually haven't heard of this Expansion score. My credit score is above average and I don't really have problems with qualifying for the deals I choose. But that was useful information, now I know how to help my friend to get started with his credit history.

Kenny, 08:25 AM, April 16, 2008
man, i try to keep in touch with all credit card market trends, but i heard nothing about the Expansion score either. weird, are you sure that this score can raise the FICO one?

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