Consumer Education in Responsible Financial Management is Important

Posted by Joachim Bartels | Apr 7, 2013 | Consumer Credit Information, Credit Scoring & Decision System, FICO (Fair Isaac), Financial Inclusion, Financial Literacy, Uncategorized, United States | 0 |

Importance of Financial Literacy: Credit scores improve as ‘new-to-credit’ consumers gain credit experience!

What’s the credit profile of “new-to-credit” consumers? FICO staff recently presented new research on this topic at the Consumer Financial Protection Bureau’s Financial Empowerment Convening. The FICO analysis showed that for this population learning how to use credit, responsible management does lead to improving credit scores and greater access to credit.

FICO findings were based on a random 5% of credit reports from a leading consumer reporting agency. The analysis focused on consumers who were new-to-credit in October 2005 and studied how their credit changed during their first six years (2005-2011). This population represents approximately 1.2 million consumers

Source: Bankinganalyticsblog.fico.com

About The Author

Joachim Bartels

Joachim C Bartels is a co-founder, director, head of information resources and Editor-in-Chief of BIIA. In his capacity as Editor-in-Chief he is responsible for the selection of relevant information content concerning industry insights, trends, technological developments, standards and policies impacting BIIA members in particular and the business information industry in general.

The BIIA library is approaching 10,000 news items and best demonstrated practices. BIIA members receive regular news alerts on key developments in the industry and the regulatory environment. The BIIA readership is widespread: between 4 to 5 thousand unique visitors access BIIA.com per month.