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FICO Expansion Credit Score Helps Build Credit Faster

Good news for students, young adults, and others without a credit score. Credit scoring agency Fair Isaac has announced a new type of credit score that will help people with insufficient credit history get approved for loans and credit scores.

Good news for students, young adults, and others without a credit score. Credit scoring agency Fair Isaac has announced a new type of credit score that will help people with insufficient credit history get approved for loans and credit scores.

This new credit score called the FICO Expansion Score will collect information about consumers’ checking accounts and loans that previously were not reporting to credit bureaus such as payday loans and rent-to-own loans (payment plans).

The FICO Expansion Score will have many similarities to the traditional FICO credit score, including a scale between 300 and 850; the higher the better. Just as lenders use the traditional FICO score to weigh a potential borrower’s credit risk, the FICO Expansion score will provide lenders with clues as to a borrower’s likeliness to repay.

What’s the downside to the FICO Expansion Credit Score? Better balance your checkbook. While having an overdraft or two on your checking account does not affect traditional credit scores, that’s not the case with the FICO Expansion Score.

It’s too soon to tell whether bouncing a check or two could harm an otherwise established and good credit score, but if you don’t have credit or have some credit issues, its one more incentive to keep an eye on that bank account balance.

If you’re curious to know where your score is, Experian allows you to check your credit reports for free.

Published or updated on February 26, 2007

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.

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