Fair Isaac, the company that created the FICO score, has created a new scoring model that may help customers with a limited credit history…

Why FICO created the Expansion Score

According to research done by Fair Isaac, almost one-fourth of all adults in the U.S. either don’t have a credit report, or have a credit report that contains too little information on which to compute a credit score. The reason behind this, they go on to state, is because the credit bureaus add new information on a customer only when it is submitted to them by creditors and businesses. Since this process is voluntary, many transactions are unreported.

What sources will FICO get this information from?

Fair Isaac has created two new subsidiaries. The first will collect information from non-traditional sources such as payday lenders, rent-to-own stores and pawn shops. It will also seek out new sources to provide additional data for the network. The second company will then assemble the information into credit files so that it can be analyzed and translated into the same credit score range as a traditional FICO score.

What does this mean to the bad credit car buyer?

For those customers that have been trying to buy a car with a subprime loan and have been turned down because of no credit history or an incomplete credit history, it might be time to give it another try. This new report will give bad credit car lenders credit scores and credit files on more people than in the past. If you have done business with rent-to-own stores and payday lenders, there is a good chance that information will now be in your credit report.

The Bottom Line

If you have been turned down for credit in the past because of a missing or incomplete credit file, the new FICO Expansion Score may make a difference. Now you may not have to settle for getting another old car at a buy here pay here lot. According to Fair Isaac, the new program could add an additional 50 million consumers to their database.

Here at Auto Credit Express, we have helped thousands of customers with bad credit, through our dealer affiliates, purchase either new or quality, low mileage used cars and, at the same time, rebuild their credit. Our web site, www.autocreditexpress.com, contains information that can help you establish a budget and estimate a car payment. It also contains an online resource center where you can get answers to many of your questions. Remember, at Auto Credit Express, we want you “on the road” to better credit.