More Consumers May Qualify for Credit Cards with the... - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » More Consumers May Qualify for Credit Cards with the New FICO Score XD 2

More Consumers May Qualify for Credit Cards with the New FICO Score XD 2

More Consumers May Qualify for Credit Cards with the New FICO Score XD 2
April
3
The content is accurate at the time of publication and is subject to change.

FICO is rolling out the next evolution of the FICO Score XD program—FICO Score XD 2. This system uses alternative data to generate credit scores for people who were previously deemed to be unscorable because they did not have an adequate credit history. With this expansion, 26.5 million consumers who were believed to be unscorable now have a shot at getting credit, and it may well be easier to get a credit card, too.

Mixed in with the 26.5 million previously unscorable consumers, 11.8 million did not have any credit files for credit bureaus to check when they apply for credit cards or loans. But with the launch of FICO Score XD 2, they can now be scored using alternative financial data.

The system is believed to be good for lenders looking to provide credit, as well as for consumers looking to get credit cards and loans. “FICO is dedicated to empowering lenders to safely and responsibly provide an onramp to mainstream credit for millions of people,” said Jim Wehmann, executive vice president of Scores, at FICO.

“With FICO XD 2, we continue to leverage alternative data sources to innovate and help lenders expand credit access when traditional credit data is unavailable to assess risk,” he added.

Providing more people with more chances

FICO Score XD 2 is generated by using a wide range of alternative data sources in order to make sure that the scores reflect the individual’s current behavior. It also uses the same methodology and scoring range (300-850) that FICO uses to develop traditional FICO scores.

In the past, FICO was able to provide scores for 91 percent of people, but now FICO Score XD 2 ups the percentage to just about 98 percent.

They also found that consumers who have a FICO Score XD 2 of over 620 and who get credit tend to have a high traditional FICO score in the future. In fact, they say that 75 percent of people have a traditional FICO score of 620 or more in the succeeding two years.

The evolution

The original FICO Score XD program was launched in 2016. It was developed by FICO in conjunction with LexisNexis Risk Solutions and Equifax. They were looking for a way to provide consumers who could not be scored using traditional methods with a reliable credit score.

The FICO Score XD was originally created to provide credit scores for people who could not be scored, but the new system has been further upgraded to pull data from additional alternative sources to create a score for a wider range of consumers. This gives lenders more ways to determine if consumers are a reliable risk for credit cards, loans and more.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Americans Are Working To Up Their Credit Score
Americans Are Working To Up Their Credit Score

Posted: August 14, 2018

Are you trying to increase your credit score? If so, you are not alone, according to a new study from Discover that finds that 61% of Americans are actively working toward upping their credit score. While all the generations are engaged in... Continue reading
Paying Bills is Getting Easier with Mastercard Bill Pay Exchange
Paying Bills is Getting Easier with Mastercard Bill Pay Exchange

Posted: October 17, 2018

MasterCard is looking to help consumers pay their bills more easily and quickly with Bill Pay Exchange, a new digital solution they are launching. The Bill Pay Exchange will let people manage and pay all sorts of monthly bills ranging from... Continue reading
Freezing Your Credit for Free with the Transunion App
Freezing Your Credit for Free with the Transunion App

Posted: October 08, 2018

Freezing your credit report is now free, and it's very easy to do with the release of a new app by Transunion, one of the three credit reporting bureaus.With this new app consumers can easily freeze their credit report in real time, and... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles. That's $600 towards travel!
For Excellent, Good Credit
Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay
For Excellent, Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!