Credit scores were so 2019. There’s a new FICO score measuring credit-users’ financial resiliency during economic downturns.
FICO Resilience Index. In response to the current recession, FICO’s new score is meant to help both lenders and credit consumers.
- Before the recession, 60 million Americans were struggling to qualify for credit, but now 39% of banks are tightening credit standards for lending money.
- This new resilience index will examine consumers’ credit consumption, payment history, number of accounts open, the amount owed, and length of credit history.
The new scale. The FICO Resilience Index will be on a scale from 1 to 99, with the scores closer to 1 being best.
How does it affect my wallet?
The Reason? FICO noticed that there isn’t always a correlation between someone’s credit score and their ability to keep their finances strong through a volatile economy.
- Their goal is to help lenders better identify who the money should be lent to in today’s economy. Meanwhile, some people with lower credit scores may be able to get loans with this new score.
Don’t want to miss our financial news you can finally use? Subscribe to our newsletter – it’s free!