Press

Recently, Fair Isaac Corp., creators of the FICO scores, announced an upcoming change to their scoring system which will more harshly penalize some actions, such as missing a loan payment, rising debt levels, or opening personal loans. According to an article from the Wall Street Journal, Fair Isaac Corp. stated that these changes to their scoring system “create a bigger gap between consumers deemed to be good and bad credit risks.” The short version is this: Consumers who have higher pre-existing credit scores, generally above 680, and make on-time loan payments could benefit from the change, while consumers who have lower credit scores due to missing payments, usually below 600, might see their scores get hit harder.

From the perspective of a person who is trying to rebuild their credit, this could be a terrifying moment of uncertainty. These are the moments that support why credit unions exist. It is important we stand by people who are more than a number or a score, and commit to supporting their journey for financial wellbeing.

At Canvas Credit Union, we recognize that acting based on the needs of our members and our commitment to stand shoulder-to-shoulder with them as the guiding financial resource, is our purpose. In fact, we know that is the foundational purpose of all credit unions, not just Canvas. Bringing financial education and resources to consumers who may find themselves on the losing-end of this increasing gap between “good and bad credit risks” is critical to ensure these members are not left behind. While the system for calculating FICO scores has changed in past years, this is the first time that many consumers could see a more negative impact on their scores. The most impactful thing we can do as an industry is support our members through this time of uncertainty and concern, regardless of which side of the projected “gap” they may fall on.

Standing shoulder-to-shoulder is what we pride ourselves on at Canvas, and this change will bring an opportunity to show it. We will stand by our members as people, and recognize that financial resources and education are invaluable to members, no matter what stage you are in your financial journey.

As an industry committed to the wellbeing of our members, we cannot meet this uncertainty with more cause for concern. We need to talk with our members, provide guidance and clarity whenever possible, and eliminate as much fear as possible. We are made by our people, and their scores do not solely determine our ability to support them. Canvas members will surely see the impact of this FICO score change, and, just as surely, they will see the support and commitment of their credit union to stand by them.