Associated Press
July 27, 2004

NEW YORK - Some American consumers have a tough time qualifying for credit cards, mortgages and other loans because they don't have credit histories: young people, recent immigrants, the newly divorced or widowed, and members of ethnic groups that traditionallyhaven't used credit.

On Tuesday, Fair Isaac Corp. of Minneapolis announced that it has developed a new score that will allow financial institutions to quickly evaluate lending risks.

Traditional credit scores are based on how well a consumer has handled credit cards, auto loans and mortgage payments; they are used to predict the likelihood the consumer will default on a new loan.

The new FICO Expansion score will be based on "nontraditional sources of data" ranging from how well the consumers handled payday loans and retail payment plans to whether they used the overdraft protection on their checking accounts responsibly, Fair Isaac Vice President Craig Dillon said during a teleconference. He said rental data could be included.

Dillon said the goal was to make it easier for these groups to get loan products that now may be denied because financial institutions have no way to evaluate them.

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