Which Came First, the FICO Score or the Loan?

How does someone without a credit history obtain a loan? It's sort of like asking whether the chicken or the egg came first. I remember the difficulty I had in getting my first credit card -- and this was after I had obtained a mortgage. I was turned down even when applying as a student, not for a poor credit history but for no credit history. This was around the time FICO scores were introduced.

According to this article in the Kansas City Star, an alternative scoring method is being developed based on an individual's payment history for utility bills, rent payments, and even payday loans.

This alternative scoring method is not yet accepted by all lenders. However it may provide more options to those trying to break through the credit history barrier to get their first credit card.