Fico Score Seeing Some Changes
In recent news the Fair Isaac Corporation is rolling out an updated FICO score. A FICO score was created back in 1989 to help consumers and businesses determine consumer’s credit worthiness. All 3 credit reporting agencies (Transunion, Equifax, and Experian) will be implementing this new scoring.
Some things that are changing with the newly updated FICO score:
1. Ignoring of small collection accounts
2. One credit problem forgiven
3. Changes to authorized users and how it affects your credit score
Things you will want to now pay attention to with regards to your score:
1. The more credit you use in regards to your balances versus credit limits will affect you more now.
2. Don’t close $0 balance accounts now. Keep them open and don’t use them.
3. You will be penalized if the lenders close your accounts. To prevent this, charge one time per month to keep activity going if you want to keep the account.
4. Diversify what credit accounts you have active. For instance, have some installment accounts (IE- CAR loans etc) AND revolving credit. This shows you are able to maintain both types of credit.
Fair Isaac is hoping these changes will help with getting a better depiction of credit worthiness. Lenders will like it more because there is going to be a more precise score of their credit. Consumers will like it more because if that score is higher, that makes the cost to get more money (loans and new credit) cheaper. The better your FICO score is, the more credit you have available and the lower your rates will potentially be to borrow money. This seems to be a win win situation for consumers and businesses.
Leadpile Lead Exchange wants to help consumers and businesses to be connected with regards to any financial matter. This new FICO score will most likely promote more consumers to want to take a deeper look at their scores and how they can maybe get them higher. Credit repair companies are probably a really good option to look at to help do that.