There isn’t one “FICO” score, for example.
New versions of the FICO score are coming, but that doesn’t necessarily mean you’ll have a harder time getting a loan. Fair Isaac Corp. FICO, -1.39%, which creates the widely-used FICO scores, will roll out two new credit scores this summer, the FICO Score 10 and the FICO Score 10 T.
There isn’t one “FICO” score The phrase “FICO score” can be applied to a wide range of different scores produced by the company. Every few years, FICO produces a new version of its credit score — FICO 8 was released in 2009, while FICO 9 came out in 2014 — but lenders can choose to use an older version. FICO 8 is the most commonly used model today, Rossman said.
“Within the mortgage world, we use a model that’s Fannie Mae-compliant,” said Jared Maxwell, direct sales division leader and vice president at Embrace Home Loans, based in Rhode Island. FICO Score 10 will weigh personal loans more heavily, penalizing borrowers who consolidate debt with personal loans and then choose to rack up more debt. As for FICO Score 10 and 10 T, there are a couple of key changes being made. The scores will weigh personal loans more heavily, the Wall Street Journal reported, in order to penalize borrowers who consolidate debt with personal loans and then go on to rack up more debt.
Your FICO score will vary from version to version While the underlying criteria roughly remains the same from version to version, the changes can result in wildly different scores for the same person. The same beneficial credit behaviors will buoy a borrower’s score regardless of what model is used, experts say. “Good credit is still about three things: paying your bills on time every time, keeping your balances as low as possible and not applying for too much credit too often,” Schulz said.
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