Question of the Day: How Many Americans Don’t Currently Have A Credit Score?
Answer: 53 million BUT…this will be changing as FICO announced that they will begin using alternative data including utility and cable bills to create FICO scores for this population. This is particularly important for college students to understand for the reasons described in the WSJ article below.
To learn more:
- Video on Fox Business with the CEO of FICO who explains the new scoring system
- From Wall Street Journal:
A new FICO credit-scoring approach by Fair Isaac Corp.FICO -0.79% could have major implications for college students, making it more important for them to stay on top of all their payments. Most college students have little credit history and as a result have a low or no FICO score, which can hurt their chances of getting approved for loans after college or getting low interest rates. The new approach, which Fair Isaac announced Thursday, uses alternative data, including payment history with cable bills, cellphone bills, utility payments and other factors.
Check out the NGPF Lesson on Credit Score Basics
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.