The world continues to get more complicated for millions of Americans trying to make a better life for themselves. The Fair Isaac Corporation — known to most consumers as the company responsible for their FICO score, which influences everything from their car insurance rates to whether they’ll be approved for a new apartment — is introducing changes to its formula. According to The New York Times, “Consumers in good financial standing should see their scores bounce a bit higher. But millions of people already in financial distress may experience a fall — meaning they’ll have more trouble getting loans or will pay more for them.”
If someone has an asset worth $500,000 and a reliable income, why should their FICO score in isolation disqualify them? We must be smarter about how we qualify people for and deliver their assets. We can never can have a repeat of the credit crisis caused by lending to people who can’t afford to pay the loan, but we can appropriately serve the people who can. Doing so will afford Americans a better life, more affordability and a more robust economy for the middle class and beyond.