A system that will allow lenders to evaluate an individual’s creditworthiness will soon be available in the Philippines, a US-based analytics company said.
In a statement issued late on Thursday, FICO announced that it had partnered with Consumer Creditscore Philippines (CCS) for the system which it said would facilitate lending in the country.
“A credit score is a statistical figure that depicts a person’s creditworthiness, the likelihood to pay back a loan. The higher the score, the more financially trustworthy a person is thought to be,” it said.
The company said it calculates a person’s credit standing using his “payment history, level of indebtedness, length of credit history, new credit, and types of credit used.”
As only 14 percent of the populace have bank accounts, Fico said the partnership with CCS would allow it to establish a new strategy where Filipinos can be assessed using “telco behavior, payment behavior in utility bills (water, electricity), and microfinance (pawn shops),” and even hospital bills.
The company urged Filipinos to “improve, maintain, or repair” their credit standing if they wanted to secure loans.
“Good credit increases a borrower’s chances of getting a loan or the credit card faster; secured with better, lower interest rates and terms,” it said.
FICO said the establishment of the system was in line with the goal of expanding financial inclusion in the country.
“[W]hen you look at a national inclusion program, and you want to actually empower and embetter the people, you have to come up with something that is equal to everyone, so everyone pays the same rate based on their risk,” FICO country director Burton Crapps said.