New Credit Health Indicator

By January 9, 2014Credit Scores

A new financial scoring system may bring an end to traditional credit reports and could help you plan your financial future. Made public in October 2013 and created by two financial advisers, FlexScore is a new method that creditors can use to assess a person’s financial health.

FlexScore not only assigns a person a rating based on his/her financial history, it also provides a more comprehensive perspective about one’s credit health.  

FlexScore Basics

  • Considers assets, debt, investments, income, and other aspects of your financial past as factors of your score
  • Assigns a score between zero and 1,000 with zero being the worst score
  • A peer ranking is provided to indicate how a person’s score compares to others
  • Offers advice for improving your score
  • Provides future-planning scenarios
  • Financial planners pay for a license to use its methodology, but anyone can receive limited FlexScore information after creating an account online

These features differentiate FlexScore from the standard credit score. So, is it worth trying?

Future Planning with FlexScore

How many times have you wished that you had a crystal ball to know how the financial actions that you want to take now will affect you later? A credit report gives you only a credit score; but, FlexScore provides a user with more robust information about his/her finances to better plan for potential life circumstances such as buying a car or a home, or spending a hefty chunk of change on a vacation. Its double-duty qualities do give it an edge, but it’s not perfect.

Cons of FlexScore

  • Privacy: Some people question how secure the system is because it’s very new and hasn’t had extensive regulation
  • Self-submitted data: Because information is self-reported, there’s a lot of risk for error
  • Proprietary: Only licensed advisers have its complete features

Though FlexScore is a novel approach to factoring financial stability with many user benefits, it probably won’t replace the customary credit score as the primary indicator of a person’s creditworthiness any time soon. People can also complete future-planning evaluations using other means, without having to invest in the system.

Evaluating Your Credit

Does this new tool have you considering your financial stability? Contact us to learn how Ovation Credit Repair can help you evaluate your creditworthiness.

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