Your credit score, commonly referred to as your FICO score, measures a consumer’s credit risk. It is calculated based on your paying history with current lenders. If you pay your bills on time, you likely have a high score – possibly over 700. If you’ve missed many payments, you could have a score as low as 300. Some people may even have a “zero” credit score, meaning they don’t have enough history to be properly analyzed by FICO’s software.

The higher your score, the more options you have in the marketplace for obtaining new credit. With a low credit score, options for getting approved for a new line of credit is often bleak. Historically, anyone with a poor credit score hasn’t been able to get a loan or only has had access to very high interest loans.

FICO, a California-based software company, recently unveiled a pilot program that could give people with low or zero credit scores easier access to credit. The program looks at paying habits in a new light. Instead of analyzing loan repayments, the pilot program will calculate scores based on a consumer’s ability to make utility bill payments.

FICO believes this program may make credit cards and possibly affordable auto loans available to people who would have been turned down for credit based on the usual FICO score calculation.

When your finances have spun out of control and you find yourself underwater with bills, it may be difficult to make even the smallest payments on existing debt. In times of financial crisis, talking to an experienced bankruptcy attorney may uncover a way out.

Contact Joel R. Spivack, Esq., about your financial situation. He will discuss alternatives to bankruptcy and how filing for bankruptcy protection may be your best option.