 TITLE: Information on New Credit Scoring Models CONTENT: New Credit Scoring Models — Lenders Using More Than FICO Score\n--------------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: September 25, 2017_\nBeyond the FICO credit score, banks and credit card issuers are digging deeper into people's lives and using powerful new tools to see where you live, how often you switch jobs or whether or not you get paid with direct deposit to decide whether you deserve a loan or a credit card. These new credit scoring models are being developed and used by lenders to look at more of a person's credit and employment history than simply pulling up their FICO score.\nBecause of the new federal regulations a lender will have to disclose why they are denying someone credit or charging a person a higher interest rate. But, the underlying data and formulas used to determine a person's credit worthiness will still remain a mystery to the average consumer.\nDeposit Behavior Score\n----------------------\nOne of these new credit scores is called the _Deposit Behavior Score_. This tracks how people manage their money by reviewing their checking and savings accounts. The actual formula is not know, but it has been determined frequent overdrafts will drag this score down. Also, people who do not have their payroll checks direct deposited or if their account goes from $3,000 to $100 every month, their scores will be lowered accordingly.\nJob Security Score\n------------------\nScoreLogix has been marketing a _Job Security Score_ to lenders since 2008. This score attempts to gauge a person's credit worthiness based on income stability. Your score is based on hundreds of economic variables — right down to employment and income levels in specific ZIP codes.\nCredit Optics Plus\n------------------\nTransUnion unveiled a new score called _Credit Optics Plus_. This score attempts to predict risk by tracking \"stability\" factors such as changes of address, cell phone service and other personal data. The score may benefit young people or recent immigrants who may have stable incomes and employment but thin credit histories, while possibly penalizing people who move a lot because of their jobs. Lenders are still testing the score.\nOther Scoring Models\n--------------------\nIt is estimated there are more than 100 credit scoring models in circulation — most with unknown names and algorithms. With 25 percent of U.S. consumers with a FICO score of 599 or less, lenders are trying to find new ways to measure risk or simply put - determine a persons credit worthiness. Digging deeper and deeper into our lives and factoring in more than just our credit history, is what lenders are doing now to evaluate whether or not your will get that car or home loan.\nSo what can you do to make sure you are not denied that loan? Pay your bills on time and monitor the information on your credit report to make sure it is accurate. Even though there are a lot of new credit scoring models floating around, banks and lenders still use the information on your credit report as the basis of their decisions. If your report is solid, the other infractions may not seem so bad. END