While the new FICO scoring system comes with some notable improvements, there are some who believe that there may be some disadvantages. To get a better idea of both the disadvantages and advantages that could have an effect on your FICO score, lets take a closer look at both ends of the spectrum.
The Disadvantages
There is really only one major disadvantage of the new FICO scoring system that has been noted and it reflects authorized users no longer being able to benefit from piggybacking on another persons good credit. The change was made to stop individuals with bad credit from being able to benefit from someone elses good credit by simply signing on the dotted line of that other persons application.
The only problem with this change is that it can very well punish individuals who are in good standing and truly share credit with another person. For instance, if a wife and husband share a credit card and see no need to apply for separate ones, the person listed as the primary user will be the only one to benefit credit wise. So if the wife is considered an authorized user, she wont be able to take advantage of her own responsible use of the card and thus wont benefit from a higher FICO score.
Some Advantages
Despite the fact that there is a disadvantage associated with the new FICO scoring system, it was actually created to benefit borrowers. Lets look at some changes that actually have the potential to improve your FICO score:
- Your first missed payment is forgiven. If you make the honest mistake that many do by forgetting to make a payment on bill you owe, it will be forgiven the first time. However, if it occurs again, it will receive a harsher consequence.
- Small collection accounts are overlooked. Another improvement inherent in the new FICO scoring system is the fact that any collection accounts under $100 will be forgiven and will not affect your FICO score.
Many changes that affect a wide spectrum of individuals can come with a few disadvantages. But for the most part, it seems that the new FICO scoring system brings with it several advantages that can positively affect your FICO score.
