Spelunking
01-05-2008, 05:06 PM
source (http://articles.moneycentral.msn.com/Banking/YourCreditRating/BuildAKillerCreditScoreIn2008.aspx?page=1)
Fair Isaac, the company that created the leading FICO credit score, has announced changes to its formula.
As a result, some behaviors that may not have hurt your score much in the past could cause your numbers to plunge, while other actions could help you boost your score more than in the past. For example:
Applying for new credit accounts may hurt less.
Having high balances on your credit cards could hurt more.
Actively using the credit accounts you have may be more important.
Having both revolving and installment accounts on your report could help you more, as the new formula is more sensitive to your ability to handle different types of credit.
Fair Isaac says most consumers will see a slight increase in their FICO 08 scores compared with their classic FICO numbers, but others will see a drop.
Fair Isaac announced its new version of the FICO score would ignore authorized-user information (piggy-backing)
The new formula also takes a closer look at people who have credit problems. Fair Isaac said FICO 08 will be less punishing to those who have had a single serious credit setback, such as a charge-off or a repossession, as long as their other active credit accounts are all in good standing.
Finally, the new formula reflects the fact that consumers today are more active seekers and users of credit, applying for more credit cards and other accounts than in the past. Having a "moderate amount" of credit inquiries on our credit reports -- inquiries that reflect our own efforts to open accounts -- won't be as detrimental to our scores under the new formula, said Fair Isaac spokesman Craig Watts. He declined to define "moderate amount," however, saying Fair Isaac isn't comfortable revealing more information about the formula.
Although Experian and TransUnion will likely offer FICO 08 to lenders by spring, the third bureau, Equifax, says it won't offer the score until the lawsuit (Fair Isaac vs Equifax) is resolved.
Fair Isaac, the company that created the leading FICO credit score, has announced changes to its formula.
As a result, some behaviors that may not have hurt your score much in the past could cause your numbers to plunge, while other actions could help you boost your score more than in the past. For example:
Applying for new credit accounts may hurt less.
Having high balances on your credit cards could hurt more.
Actively using the credit accounts you have may be more important.
Having both revolving and installment accounts on your report could help you more, as the new formula is more sensitive to your ability to handle different types of credit.
Fair Isaac says most consumers will see a slight increase in their FICO 08 scores compared with their classic FICO numbers, but others will see a drop.
Fair Isaac announced its new version of the FICO score would ignore authorized-user information (piggy-backing)
The new formula also takes a closer look at people who have credit problems. Fair Isaac said FICO 08 will be less punishing to those who have had a single serious credit setback, such as a charge-off or a repossession, as long as their other active credit accounts are all in good standing.
Finally, the new formula reflects the fact that consumers today are more active seekers and users of credit, applying for more credit cards and other accounts than in the past. Having a "moderate amount" of credit inquiries on our credit reports -- inquiries that reflect our own efforts to open accounts -- won't be as detrimental to our scores under the new formula, said Fair Isaac spokesman Craig Watts. He declined to define "moderate amount," however, saying Fair Isaac isn't comfortable revealing more information about the formula.
Although Experian and TransUnion will likely offer FICO 08 to lenders by spring, the third bureau, Equifax, says it won't offer the score until the lawsuit (Fair Isaac vs Equifax) is resolved.