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