FICO 08: What’s new with your credit score?
Haven’t figured out what your credit score is? Well, even if you did check it today, you’d find that by the end of 2008, it may be very different. This is because the Fair Issac Corporation (who develops the FICO scores) is working to get Americans closer to more legitimate predictions of how they will handle their credit, be it a credit card or loan.
FICO is predicting that the new scoring system will assist lenders with reducing loan default rates on between 5 and 15 percent. On the bright side, FICO 08 should go easier on consumers who occasionally miss a payment while coming down harder on those who repeatedly do not maintain their accounts. For example, someone will score better if they miss only one obligation, while accurately staying current with three others. However, those with a number of problematic accounts may have their credit score drop.
From my perspective, this is an excellent step in the right direction. The closer the FICO score can predict how people are going to pay, the fewer defaulted loans there will be. This ultimately wastes lenders’ money as it is a loan that will never be paid back – it’s just like throwing money away, which no one likes to do.
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how can I HAVE THE FICO CORRECT INCORRECT INFORMATION ON MY SCORE AND PROFILE?
Richard, I cover the answer to this question in detail in the Student Credit Forum. Here is the post: http://forum.studentplatinum.com/frustrated-t42.html
The systems to predict Fico score are getting smarter and smarter everyday, therefore the best practice to increase your Fico would be a sound financial behavior like paying bills on-time and not getting so much debt, etc.