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April Focus on Fair Housing, Fair Isaac and Financial Inclusion

April Focus on Fair Housing, Fair Isaac and Financial Inclusion
April is Financial Inclusion Month. It’s also Fair Housing Month. These two occasions cross paths when we consider that 138 million Americans are struggling with their financial health, and only 6 out of 10 (59 percent) households would have enough liquid savings to pay an unexpected $2,000 expense, according to reports by the Center Financial Services Innovation (CFSI) that also highlight in the event of immediate need that credit is not a viable option for more than 108 million Americans who lack traditional credit cards and even modern online lending. Fair Isaac, the company that in 1956 created the FICO credit scoring software that’s still in use today as a measure of consumer credit risk, is a tie that binds Fair Housing and the oh so difficult goal of financial inclusion when we look to the cash challenges consumers face when their credit score is less than perfect, and below the minimum requirement to secure a lease for rental housing. A quick synopsis: The Fair Housing Act was originally passed in the late 1960s through the urging of the U.S. Department of Housing and Urban Development (HUD) following passage of the Civil Rights Act in 1968. Its primary purpose was to eliminate discrimination between buyer and seller, landlord and tenant, making it unlawful to refuse to sell or rent to an individual base on race. The law has been amended in years since with additional limitations on discrimination based, most notably, on personal handicaps with the passage of the Americans with Dis......
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Which Credit Risk Score Model is Right for Your Rental Screening?

Which Credit Risk Score Model is Right for Your Rental Screening?

You hear about credit risk scores all the time on TV, websites, credit card promotions in your mail and even on your cell phone apps, so you already know how much of an impact they make on your rental decision process. However, do you know the differences between each scoring model? Use our guide below to understand how your applicant’s credit risk score might vary between each scoring model and which one is right for you.

FICO (The Fair Issac Company)

Well recognized by its acronym, FICO is a nationwide risk score developed by the Fair Issac Company.

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Not All Credit Scores Are Created Equal, FICO and VantageScore

Not All Credit Scores Are Created Equal, FICO and VantageScore

According to the Fair Isaac Corporation, in the 1950’s, Bill Fair and Earl Isaac founded the company, which introduced a new concept of credit scoring to credit grantors. In 1981, FICO introduced the first credit bureau risk score. Today, the predictive analytics company works with businesses in more than 80 countries to determine creditworthiness.

FICO Score Analysis factors payment history, amount of debt, length of credit history, new credit and types of credit used to determine an individual’s risk score. Long credit history, no serious delinquencies and recent credit card use help boost a FICO score, while high credit usage, recent collection and bad payment history have negative impact. Factors also include how many times lenders have requested information about your credit. Scores range from 300 to 850 and the higher the score, the better.

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