The Freedom From Debt Blog

Credit scoring company Fair Isaac has announced that major changes are coming to the credit scoring system.  The changes, termed FICO 08, will attempt to correct what many feel are problems with the current credit scoring systems. 

Some of the major changes will involve:

• Small delinquincies of less than $100, generally non-credit related, will have a reduced impact or may be ignored, which will boost the scores of many people who have seen an overdue library fine or past due utility bill show up on their credit report.
• The authorized user piggybacking scheme, in which an authorized user can potentially help his or her credit score by piggybacking of the main account holder’s good credit, will no longer work.
• Changes to make credit scores less vulnerable to manipulations and “quick fixes” to artificially raise credit scores.

More analysis on the forthcoming changes is available here: http://www.visioncredit.org/fico-08-brings-new-enhancements-to-credit-scoring/.  You can also read more about how your current credit score works, directly from myFico, here: http://www.myfico.com/Downloads/Files/myFICO_UYFS_Booklet.pdf.

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