A New FICO Score Debuts: How Will This Affect Ohio Consumers?
Last week Fair Isaac Corporation began offering what they claim is a new and improved FICO credit score dubbed "FICO 08." TransUnion, LLC (one of the three major credit bureaus) also announced it will begin offering the new FICO score with the two other major credit bureaus expected to follow soon. The FICO score is a score developed by the Fair Isaac Corporation in an attempt to evaluate a borrower's likelihood of default.
Fair Isaac claims the new FICO 08 score will give lenders a "predictive boost where lenders need it most." The score will retain the same credit range, from 300 to 850 (the higher the better). However, according to the Wall Street Journal, the new score is supposed to be more forgiving to those that have just one slip-up or late payment and significantly harder on repeat offenders. Fair Isaac also claims the new score is also supposed to provide a more thorough or "deeper" analysis of poor credit borrowers and borrowers with little or "thin" credit history. Fair Isaac has said that consumers with accounts in good standing may see their score rise slightly and that the overall accuracy of credit decisions should increase by up to fifteen percent.
Ultimately, the new FICO 08 will probably not have a significant impact on most Ohio consumers for quite some time. The Wall Street Journal reports that it could be "months or even years before the score is widely available to consumers" because most lenders will want to take time to evaluate the score and determine how well it works with their processes before implementing it and some lenders may even choose not to use the new score.
To learn more about your credit score, please see the prior entry Get to Know Your Credit Score Ohio. For information on where and how to get your credit report, please see the prior entry Ohio Credit Concerns: How Long Will a Bankruptcy Filing Stay on My Credit Report?
