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FICO 10/10T Changes Could Lower Your Credit Score

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Moderator Emeritus

Re: FICO Changes Could Lower Your Credit Score


@GApeachy wrote:

https://www.forbes.com/sites/lisettevoytko/2020/01/23/report-fico-credit-score-adjustments-could-hur...

 

I couldn't read the whole article due to no subscription but found this if interested. 


Thanks for the readable story on the new FICO 10 T Scoring System Smiley Happy

Message 11 of 118
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Valued Member

Re: FICO Changes Could Lower Your Credit Score

https://www.cnbc.com/2020/01/23/fico-10-credit-score-changes.html

I don't see many banks jumping to switch to this model since implementing it cost them money but this new scoring model could drive so many people over the financial edge.
Message 12 of 118
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Regular Contributor

Re: FICO Changes Could Lower Your Credit Score

It doesn't say when it starts. Any idea when? 

Message 13 of 118
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Regular Contributor

Launch of FICO 10

Edit: I was informed there was a discussion created for this that started earlier today before this thread in the Credit News section of these forums. Here is a link: https://ficoforums.myfico.com/t5/Credit-in-the-News/FICO-Changes-Could-Lower-Your-Credit-Score/td-p/...

 

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Hi everyone. I did a search in the forums and didn't see any posts about FICO 10. I just read this article which touches on some of the coming changes.

 

https://www.cnbc.com/2020/01/23/fico-10-credit-score-changes.html

 

Key quotes:

 

"Fair Isaac Corp., the company behind the popular FICO credit score, announced the launch of its latest FICO 10 model today, Jan. 23, that will start incorporating consumers’ debt levels into their scoring model."

 

"FICO estimates that about 110 million consumers will see a change to their score under the new credit score model, with most people seeing less than a 20 point swing in either direction. Roughly 40 million will see a shift upward over 20 points and another 40 million will see a shift downward, FICO says."

 

"“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 vice president of product management, said in a statement."

 

"The new scoring model will also likely create a wider gap between those who are considered good credit risks and those who are not. Consumers who already have good credit, for example, and who continue to whittle down their already existing loans and make on-time payments will see higher scores. But those who score below 600 will see bigger dips in their scores under the new model."

 

 

 

 


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Scores started in low 500's | Signature last updated 2/4/20
Message 14 of 118
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Senior Contributor

Re: FICO Changes Could Lower Your Credit Score

Here's a version of the WSJ article that is not (yet) behind the paywall:  https://www.wsj.com/articles/fico-changes-could-lower-your-credit-score-11579780800





Message 15 of 118
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Valued Contributor

Re: Launch of FICO 10

Interesting.... And this tidbit:

"FICO also plans to flag consumers who sign up for personal loans, which are generally considered more risky since these are unsecured and typically do not require collateral like a car or a house."

 

Wonder if/how that may relate to unsecured student loans.

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Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
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2020 Goal Score | 790s


My AAoA: 3.0 years not incl. AU / 3.3 years incl. AU
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Message 16 of 118
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Regular Contributor

Re: Launch of FICO 10

This should be interesting, I wonder when we will start seeing these scores on myFICO.
Message 17 of 118
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Re: Launch of FICO 10

Message 18 of 118
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Valued Contributor

Re: FICO Changes Could Lower Your Credit Score


@rgninja wrote:
https://www.cnbc.com/2020/01/23/fico-10-credit-score-changes.html

I don't see many banks jumping to switch to this model since implementing it cost them money but this new scoring model could drive so many people over the financial edge.

How does this cost banks money or drive people over the financial edge?

 

The way I read this, as one person put, is that utilization will have a memory under the new model. People already spending themselves into oblivion will continue to do so; it's just that lenders might get a bit more of a warning without having to have had historical data on that user on-hand already. If anything, this might save them money in the long-term, and the banks that cater to higher-risk people in return for higher interest rates...well, I suspect they'll just keep on doing that regardless of this new score.

Message 19 of 118
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Regular Contributor

Re: FICO Changes Could Lower Your Credit Score

I’m sure we will find out when it starts. MyFICO peeps will be all over it.
Message 20 of 118
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