The FICO Resilience Index was created by the Fair Isaac Corp., also the creator of the FICO credit scoring system, to be used as a supplemental score that gauges a buyer's likelihood to default in the the event of a future recession. The new credit index was released last week and has the potential to help more buyers qualify for a mortgage by allowing lenders to assess their ability to withstand the effects of future economic changes even if the currently have lower credit scores.
The new scoring tool works differently than the traditional FICO score by placing less importance on missed payments and a higher emphasis on having overall lower account balances and credit usage. Measuring on a scale of 1 to 99, lower scores reflect greater financial stability and higher scores indicate more sensitivity to possible economic changes. Consumers who have lower traditional FICO scores but also have lower balances, credit usage and inquiries may benefit from the new index and see a boost in their creditworthiness by lenders.
For more information about the New Resilience Index, the article “FICO Introduces New Resilience Index. Here’s What It Might Mean for You,” Forbes.com (June 29, 2020) has great information, or contact your lender directly.
No comments:
Post a Comment