FICO changing model for credit scores

[dr.girlfriend]

www.nbcphiladelphia.com/news/business/110-million-consumers-could-see-their-credit-scores-change-under-new-fico-scoring/2279335/

Here are some key paragraphs:

FICO estimates that about 110 million consumers will see a change of less than 20 points to their score under the new credit score model. Overall, roughly 80 million consumers will see a change in score of 20 or more points in either direction, upward or downward, FICO says.

Those who fall behind on their loan payments are more likely see the drop in their score, according to the Wall Street Journal, who first reported the changes. 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.

“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.