Top 10 Questions About the FICO® Resilience Index
FICO recently announced the FICO® Resilience Index (FRI), a tool used by lenders to help identify which borrowers will be resilient during uncertain economic times. What follows are some of the most commonly asked questions people have about the FICO Resilience Index:
1. What are the characteristics of a resilient borrower?
The most resilient individuals (those who may be less likely to be affected in the event of an economic downturn) may be those who tend to have a mix of different types of credit, lower balances, a longer credit history, fewer active accounts, and less activity searching for new credit. Consumers with an FRI in the 1 to 44 range are viewed as the most prepared to weather an economic shift.
2. How does this help consumers?
In changing economies, the FICO Resilience Index can enable lenders to keep credit flowing to people who can be identified as more resilient across FICO® Score bands including potentially lower than average FICO Scores.
3. How does the FICO Resilience Index differ from a FICO® Score?
FICO Scores are designed to predict credit risk independent of the economy. The FICO Resilience Index is a new analytic tool that predicts a consumer's credit risk in the event of an economic downturn.
4. What information is used to calculate the FICO Resilience Index?
Like the FICO Score, the FICO Resilience Index uses information from your credit report and ONLY information from your credit report. The difference between the FICO Score and the FICO Resilience Index is in how the information from your credit report is weighted in its calculation. And as a reminder, your income, employment status, race, ethnicity, and gender are not data fields in your credit report.
5. Are my savings, investments, or net worth used to calculate the FICO Resilience index?
No. The FICO Resilience index only considers information in your credit report. This data is grouped into five categories: payment history, amounts owed, length of credit history, new credit, and credit mix.
6. Does the FICO Resilience Index consider coronavirus forbearance or deferment programs in its calculation?
No. Just like FICO Scores, the fact that an account is reported to be in forbearance or deferment alone is not considered in the calculation of the FICO Resilience Index.
7. Is a lower value better?
Yes! Unlike the FICO Score, a lower value is better. The FICO Resilience Index has a range of 1-99, where lower values indicate a person may be more resilient amidst changing economic cycles.
8. Was the FICO Resilience Index created in response to the coronavirus?
No. The FICO Resilience Index has been in development for several years and was not created to address credit changes during coronavirus.
9. Does the FICO Resilience Index predict future recessions?
No. The FICO Resilience Index is not designed to predict future economic conditions.
10. How can I get my FICO Resilience Index?
You can get your FICO Resilience Index through any myFICO products that include an Equifax credit report:
- Subscription plans: Advanced or Premier
- One-time reports: 1-bureau credit report with Equifax or a 3-bureau credit report (includes Equifax)
If you currently have a myFICO subscription that includes Equifax credit reports, you will see your FICO Resilience Index on the Scores tab of the mobile app, or if you're using the website, it will be in the Dashboard in the Member Center. Make sure you are refreshing your credit reports when they become available to ensure you get access to your FRI.
For more information check out: https://www.fico.com/blogs/fico-resilience-index-now-available-lenders-pilot
Elizabeth is a product manager at myFICO in San Jose, CA.