Payday loans, evictions and even payments for child support will now be factored into Fair Isaac Corp. (FICO) score courtesy of data provider CoreLogic. Rent, phone and utility payments may also be factored sometime soon.
So what does this mean for us, the average American consumer?
The obvious effect will be on the financing capabilities of individuals. Some people will benefit from their favorable payment histories, while others will end up taking a direct hit to their scores. Consumer transparency is the keyword here, and it’s going to be something that the banks and lenders will love to toss around.
And then there’s the scary possibility of people being “defined” by their credit scores.
This is already happening to a certain extent. Established individuals with high credit scores are given the opportunity to buy homes or take out an auto loan, yes, but the folks that are struggling with financial difficulties don’t need more handicaps in their lives.
Then again, the inability to properly assess the likelihood that someone’s going to pay his or her debts on time is needed now more than ever. Remember subprime mortgaging? Yep, that basically killed the real estate market and took the rest of the American economy down with it.
How about you – what’s your take on this recent move by FICO? Yea or nay?