Just when you thought you had the credit scoring system all figured out along comes FICO 08. Now we all know with all the changes in the lending world that credit socres are so overly important and we are all looking for ways to help our clients maximize their scores and actually FICO 08 just might help some.
Transunion started using it end of January and Equifax is planning a fall launch and Experian, well it is anyones guess when they might roll it out. (Experian and FICO are not very friendly these days)
Some of the changes are
- Collections that start under $100 will not have an impact on your score. These are 3rd party collection accounts. You get no love for paying down that $500 collection to $75.
- Maxed out credit cards will hurt MORE
- An approximate 15% shift in points towards credit use. This will help your score if you care little debt on your credit cards and hurt you if you are maxed out
- A single 30 day late will not hurt as bad or one rough spot BUT a pattern of 30 day lates will hurt more
- Authorized User accounts will still be scored, BUT there is going to be some sort of "reality test" that FICO isn't sharing with us. The guess is if the consumer has a 2 year credit history and there is a 20 year old authorized user account on that consumers credit they wont be receiving the "points" for that account. In other words does that account make any sense in the consumers credit profile.
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