How to Understand FICO's New Scoring Model

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By BSMartin
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FICO credit score

FICO has changed their tune again. Adding some new scoring models to make credit scoring more fair and balanced. Here is what you need to know.

Difficulty: Easy

Instructions

Step 1

First, the new scoring model is meant to target the subprime borrower, so if your credit score is over 700, these new rules won't affect you much.
Step 2

FICO is now going to forgive any collection under $100.00. That means really, small debts won't affect your credit score.
Step 3

FICO will also be more forgiving for those consumers that are in arrears on a debt 60-90 days, if they are up-to-date on your other debts.
Step 4

FICO will also not add points to your score for "piggybacking." Which put simply, means those who become authorized users on another's credit account in order to boost their scores. Authorized users won't see any boost to their scores.
Step 5

It may take months for these new scoring guides to come into affect, so in the meantime get your credit report from each bureau and make sure the information is accurate.