New Credit Score System 2015


A new program will take place in a couple of months to help millions of Americans with no credit. About 53 million people do not have FICO scores that are needed for lending decisions. In the past many banks and credit card companies overlooked millions of Americans because they require a minimum score of 620 to qualify for personal loans, vehicle loans, mortgage loans, and credit cards. The new credit score system will change all this because paying on time for utility bills, cable bills, and cellphone bills will now count on an individual’s credit report. Their credit history will increase and potential lenders will consider them as less risky. Lenders will now account for paying bills on time as a sign for good future payments. The new credit score will help about 15 million of the 53 million who do not have any credit history to be considered for loans and to qualify for a Visa and MasterCard as well.

There are some however who disagree with the new credit score system mainly because it relies heavily on utility companies to report correct information most likely leading to errors. Others suggest consumers that struggle to make ends meet will have more credit options that can further put them into debt. Issuing more credit cards and loans to millions of Americans without much history will hurt more in the long run because they may not fully comprehend what they are getting themselves into. It can lead to more defaults for financially strapped consumers. Also, a limited or no credit history means Americans may receive credit cards with high interest rates hurting them at the end of the month if they do not pay the full balance.


The supporters suggest the new credit score system will help make more loans and credit cards possible to people that normally would not get considered. It’s their choice to apply and will give them more opportunities to prove themselves and to other people they are responsible. The new system will create a separate payment history profile for no or bad credit individuals to calculate an alternative credit score. If they get approved based on the alternative credit score, a line of credit will be established. If the card holder maintains a low balance for six months they will receive a regular FICO score which will then give him/her more creditworthiness to apply for car and mortgage loans.