In Credit Cards, Debt

Your credit score may change 20 points – for the good or bad – this summer!!

Fico recently announced this past Thursday expected changes to the credit score as we may know it.  Some individuals may see a shift in their score up to 20 points!

Today’s FICO score takes into account one’s payment history, the length of credit history, utilization, credit mix and new credit lines.  Payment history is one of the biggest factors that impacts a person credit score.  It accounts for 35% of the score.

Here is a breakdown of how the current credit score is calculated:



The new model will take into account your previous two year credit report information to provide more insight to lenders.  In addition, it will keep the basic model as outlined above.

Those individuals who have carried higher levels of debt, had missed payments and kept balances outstanding from month to month will see a decrease in their scores.

Individuals who do not carry a heavy debt load on personal loans, make payments timely and pay off credit balances will likely see an increase of 20 points.

FICO has estimated 80 million will see a shift of 20 points, both for the good and bad.  While 110 million will only see a modest change or no change to their credit score.

Individuals can expect to see a change to their credit score this summer.

This is a good time to start considering paying off debt, keeping balances low and making certain payments are made timely. 

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