FICO updates how they calculate credit scores
Published : Sunday, 16 February, 2020 at 5:18 PM Count : 205
The Fair Isaac Corporation, or FICO, updates the way they count your credit score.
It is used by nearly 90 of the top 100 lending companies in the United States to decide whether they will lend you a new car or a home.
“The new scoring system is looking at consumer behavior and this could potentially have a negative impact on customers who are genuinely struggling to pay off debt," said Sara Rathner, a credit card specialist at Nerdwallet.
For the first time, FICOs are taking on personal loan debt and if people are using them to pay down credit card payouts under the old model, it can boost your score. However, now it can be a negative.
“These are all kinds of things you know that can lower credit scores in general,” Rathner said. “But with the new scoring model, it could potentially lower the score further.”
However, the truth is, you do not know that your lender will use the updated model.-Internet