Will FlexScore Replace Credit Scores?

A new scoring system aims to upend the way we evaluate our financial health.

Flex Score screenshot
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While FlexScores are currently based on self-reported data, Gordo says he and Burrow are constantly updating the scoring system, and soon it will be connected to people's savings, investments and other financial accounts to bypass the need for self-reporting. Gordo also acknowledges the tool is still in its early stages, since it became publicly available in beta form in October. "We have to build a bigger following first – before banks and institutions would take us seriously as a financial success score when evaluating people who would borrow money – but two or three years down the road, your FlexScore will be important," he says.

[Read: Why You Should Start Tweeting at Your Bank.]

However, privacy is one potential concern. Sara Grillo, a chartered financial analyst based in New York, says while she applauds FlexScore for encouraging people to think about their money, consumers might be hesitant to share financial details about their lives with a name that is still unfamiliar to most of them – as they should be.

According to Gordo, FlexScore accounts are protected by "bank-level" security with encryption. The site also doesn't store certain personal information such as Social Security numbers or physical addresses. While Gordo declined to share how many users have signed up for FlexScore, he says it is more than 10,000, and the number has tripled since September when they presented their tool at the Finovate conference in New York.

One of those users, John Patterson, 35, an officer in the California Highway Patrol, says the tool inspired him to look into long-term care insurance, as well as reconsider his estate plans and talk to his father about his financial well-being. "It made me sit down and make sure everything is how we wanted it," he says.

Indeed, the greatest benefit of FlexScore might be just that. While it's not yet clear if lenders will start to use FlexScore as a method of judging creditworthiness, "one positive appeal to a broader measure of financial well-being driven by user input is that it causes individuals to be more mindful, conscious and connected to their finances," says Manisha Thakor, founder of MoneyZen Wealth Management.

For now, that's exactly what Gordo hopes will happen. Then, he can take on credit scores.