It's a perfect Catch-22: If your credit history is insufficient to get a FICO credit score, it's hard to qualify for a loan or a credit card. That's because many lenders use FICO scores to decide whether to offer you credit and to determine your interest rate. But if a bank won't give you a loan, how can you build a credit history and compile a score?
Fair Isaac, the firm that created the FICO score, has developed the new FICO Expansion score to measure the creditworthiness of people who have little or no information on file with the three major credit bureaus. The new score, like the traditional FICO score, runs from 300 to 850. A score in the 700s indicates that you are a good credit risk.
Instead of using credit-card history and mortgage payments to calculate the score, Fair Isaac picks up other data -- for example, whether you pay your electric bill on time and maintain a clean checking account. So twentysomethings who rent an apartment should have a better chance of getting credit on good terms.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Fair Isaac says car dealers and credit-card issuers are starting to use its Expansion score. But mortgage lenders are waiting to see whether Fannie Mae and Freddie Mac are willing to buy loans made using the new scores. -- Joan Goldwasser
-
What's Next for MicroStrategy Stock as Bitcoin Nears $100K?MicroStrategy stock is up more than fivefold in 2024 thanks to a furious rally in bitcoin. Here's what you need to know.
-
BJ's Wholesale Pops on Membership Fee Hike, Stock BuybacksBJ's stock is rallying Thursday after the warehouse club raised its membership fee for the first time in seven years and unveiled a big stock buyback program. Here's what you need to know.
-
Roth IRA Contribution Limits for 2024 and 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How to Figure Out How Much Life Insurance You Needinsurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life insurance needs.
-
Amazon Big Deal Days Is Coming! We’ve Got All the DetailsAmazon Prime To kick off the holiday season with a bang, Amazon Big Deal Days runs Tuesday, October 8 and Wednesday, October 9.
-
How to Shop for Life Insurance in 3 Easy Stepsinsurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
-
Five Ways to Shop for a Low Mortgage RateBecoming a Homeowner Mortgage rates are high this year, but you can still find an affordable loan with these tips.
-
Retirees, It's Not Too Late to Buy Life Insurancelife insurance Improvements in underwriting have made it easier to qualify for life insurance, which can be a useful estate-planning tool.
