SAN FRANCISCO – Fair Isaac Corp. is tweaking the formulas behind the company’s widely used credit scoring system, which helps banks determine whether millions of Americans receive loans and mortgages. Executives say changes to algorithms and databases, which will take place starting in September, will improve the accuracy of the company’s popular FICO score – particularly for so-called “subprime” borrowers and for new immigrants, young people and others who have “thin files” and lack credit history. Minneapolis-based Fair Isaac assesses credit history from the three major credit bureaus – Equifax, Experian and TransUnion – to rank roughly 165 million American adults on a scale from 300 to 850. Thousands of banks, credit card companies, mortgage brokers, landlords and businesses use the FICO score to assess consumers’ credit risk. The number can affect their interest rates, whether they get accepted into a new housing unit or how many credit card offers they’ll receive in the mail. People who score below about 620 because of late payments, defaults, bankruptcy and other problems are considered high-risk. Lenders generally charge them higher interest rates to guard against the potential for losses. “Just because people don’t have thick credit files doesn’t mean they’re not creditworthy. It generally means that they’ve not been here long enough to establish credit or have cultural aversions toward credit, which isn’t necessarily a bad thing,” Acosta said. “We’ve been advocating that lenders and credit-scoring models start looking at other metrics that can be just as predictive of credit-worthiness, whether it’s rental history, utility bills or rent-to-own type payment histories.” Fair Isaac’s updates come amid growing concern over subprime buyers – people with sketchy jobs or credit histories who purchased houses with adjustable-rate mortgages whose payments have increased and, in some cases, exceeded their monthly income. According to research firm RealtyTrac Inc., mortgage lenders foreclosed on 62 percent more U.S. homes in April than a year ago. Greene said improved FICO score accuracy could help lenders assess risk better, possibly helping prevent another subprime fallout.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! Borrowers with a score of about 720 or higher are low-risk. Those with sterling scores are more likely to qualify for lower-interest loans, higher loan amounts or multiple mortgages. Changes to FICO algorithms shouldn’t change anyone’s score, Fair Isaac CEO Mark Greene emphasized. But the tweaks will improve the score’s accuracy and give banks more confidence in determining a customer’s risk. In the fall, Fair Isaac will expand the number of classifications that consumers fit into. Those who have declared bankruptcy are put into a “segment” with others who have done the same; if not, they’d be assessed too harshly relative to people who have never missed a payment in their lives. The company will expand from 10 to 12 segments. Executives – who heavily guard their intellectual property and would not provide many other details of the changes – would not name the categories. The changes are probably good news for new U.S. immigrants, said Gary Acosta, co-founder of the Washington-based National Association of Hispanic Real Estate Professionals. He said a growing number of immigrants, including some of the 50 million Americans without FICO scores, want to buy homes but often can’t get affordable loans if they have never had a line of credit or spent decades in cash economies where loans are taboo.