Here at OAS FCU we always seek ways to help members prosper. That includes helping them build strong, healthy credit histories. Now we’ve taken one extra step by adopting the use of the FICO 9 credit score by our Lending Department. This new scoring system helps consumers maintain a better credit history with common sense rules.

Your credit history

As a consumer, your credit report reflects your financial habits and behavior. They all include loans, lines of credit, student debts, financial legal decisions –such as liens and bankruptcies- and other accounts that you may incur involuntarily, such as medical bills. This report also reflects defaults and accounts in collections through agencies.

Until recently, credit reports have tended to reflect more on the bad and give less attention to the good behavior of consumers. But thanks to agencies like the Attorney General’s Office and the Consumer Financial Protection Bureau (the CFPB), that’s changing.

The reason for change

Consumers’ advocates in the US have noticed the disparity of information gathered regarding consumers; on the one hand, reports tend to favor those who can manage large expenses –namely mortgages-.

On the other hand, they give too much attention to debt that consumers didn’t mean to incur, such as medical debts. Also, they handle very poorly the clearing of debts that have been paid to collections agencies. This means that sometimes one consumer will have two negative notes for the same account: one from the original lender, and one from the collections agency.

And finally, consumers who aren’t homeowners get zero benefits from their monthly rent payments, a debt just as important as that of a mortgage payment.

Things are changing now.

FICO 9

In 2020 FICO, the agency that generates the credit scores used in most lending models in the United States introduced a new scoring system. FICO 9 scoring reflects three fundamental changes that benefit consumers:

• It reflects rent and utility payments from those landlords and companies that report. This brings renters’ payments in line with mortgage payments.
• With FICO 9, when a consumer pays off a debt in the hands of collectors and it appears “Paid in full”, the scoring system removes the negative effect of that debt from the score.
• Consumer debts, considered involuntary, now have a smaller weight on a person’s credit score.

At OAS FCU

At the Credit Union we’ve decided to start using this score to help you improve your credit and prosper. Using more advanced credit scoring models allows us to offer you better loan terms and better rates. This means that loans will be even more affordable and, as you pay them off, you receive added long term benefits to you credit reports.

And rest assured, we report our loans to credit bureaus.

Other helpful info

If you wish to learn more about your credit history, obtain a free credit report, or wish to improve your credit score, here at OAS FCU we have many ways to help you:

• Don’t miss our post that teaches you how to create your own monthly budget, the basis of every healthy credit history.
• For more information on credit reports, and how to build yours, check out this super informative module.
• If you have a good credit history but look to improve it, this blog post will help.
• Additionally, one can’t be too careful in the age of identity theft. Remember to examine your credit report regularly. It will not only help you prevent identity theft; it will also help you catch mistakes that could be affecting your credit score negatively. You can get a free report every year.
• And to end, if you seek financial counseling, OAS FCU offers the services of GreenPath, an agency that provides counseling and other types of assistance to our members free of charge.