Have you heard about the new FICO 10 scoring model launching this summer? The credit-scoring system is updated every five to seven years, and it’s up for review now. Here are the big changes this time around.
- Under the new FICO 10 scoring model, creditors will be able to see back 24 months of payment history and take that into consideration when evaluating applications. They will look at things like whether you carry a balance, or if you run up your cards and then pay them down by the time of payment dates.
- The new FICO 10 scoring model will report the rate of credit you’re getting over time. For example, due to the increasing popularity of sites like Prosper and Kabbage that provide personal loans to pay off your high-interest credit cards, FICO 10 will track this usage and look at if you run right back out and get more higher interest credit cards. FICO 10 will weigh in personal loans more heavily!
- Short-term high balances will not be penalized. So, if you have a big one-time purchase or max out the card once, that will be taken into consideration better than it was before and won’t negatively impact your score. Remember, they will be focusing on consistency.
More and more aspects of our life are being controlled by what information is being reflected on our credit report. Scorewell Inc. is committed to helping our clients receive the highest score possible and a credit report that is free from inaccurate, obsolete and unverifiable information.