Olde Hornet
Well-Known Member
Bad news: The new FICO score changes could impact the credit cards you qualify for
The FICO 10 scoring model is slated for a summer release and could cause your credit score to drop 20 points as the model looks at past debt and balances.
www.cnbc.com
Fair Isaac Corp., the creator of the FICO score, announced today, Jan. 23, the new FICO 10 model, which is expected to cause scores to fluctuate roughly 20 points. This change comes on the heels of the average FICO score hitting a record high of 703 earlier this month.
The new credit scoring model will be calculated to incorporate consumers’ account balances for the previous 24-plus months, which is bad news for anyone carrying balances month to month. These changes are expected to widen the gap between people with good credit (scores 670 to 739) and those with bad credit (scores below 580).
“Those consumers with recent delinquency or high utilization are likely going to see a downward shift, and depending on the severity and recency of the delinquency it could be significant,” Dave Shellenberger, FICO VP of product management, says.
FICO estimates that roughly 110 million consumers will see a change to their credit score once the new model is in effect later this summer. Approximately 40 million consumers will see a shift upward over 20 points and another 40 million will see a shift downward.