FICO Is About To Change Credit Scores. Here’s Why It Matters
NPR recently wrote an article “FICO Is About To Change Credit Scores. Here’s Why It Matters” by Chris Arnold. There is also a great 3-minute audio on this topic – listen below.
Credit scores for many Americans are about to change — even if they don’t do anything.
The changes will be extensive. About 40 million Americans are likely to see their credit scores drop by 20 points or more, and an equal number should go up by as much, according to Joanne Gaskin, vice president of scores and analytics at FICO, the company at the heart of the credit scoring system.
When FICO updates the way it determines credit scores, millions of Americans will see a change in their credit score – it could drop by as much as 20 points or go up.
FICO’s changes will be directly impacting personal loans. When the changes take place they will not immediately affect those seeking a mortgage, however, the article shares some very useful information and the impact will eventually hit mortgages. excerpt: “home mortgages, lenders tend to use older versions of the FICO score, so the new version won’t have an impact on all types of lending.”