A credit score for those with no credit history

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Lenders are being offered a new scoring process for people with little or no credit history. These are usually young people, recent immigrants, and low-income individuals. The new scoring plan will make it easier for them to get credit cards and loans without paying high interest rates.

Fair Isaac Corp., the creator of the FICO credit score used by most lenders, recently started the new system. They will be able to provide a score ranging from 150 to 950 that reflects financial health.

The score is based on how well consumers handle their bank accounts or payments on retail purchase plans. Fair Isaac expects to add other sources, such as rent payments. Initially the score is available only to businesses, but the company says it will soon offer scores directly to consumers.

Although 160 million adults in the U.S. have enough credit information to qualify for a standard credit score, a many as 55 million fall below that screen, according to Fair Isaac. This is a huge customer base, and lenders want help assessing it.

Novadebt credit counseling agency (Freehold, N.J.), cautions that the new scores could lead to a higher debt load for people who don't manage debt well.

Long Island Money & Careers Articles > A credit score for those with no credit history