The way lenders determine your “credit worthiness” is through the FICO credit score formula, however that formula has changed. To get better deals on your mortgage loan, auto loan, or even your cell phone contract – your new FICO score will now determine whether you get that better deal or not. With the new changes, learn how your credit score has changed significantly.
The company that pioneered the FICO scoring system, Fair Isaac, stated that the new scoring system is more accurate than the older system. With the new FICO scoring system here – take a look at the impact that it may have had on your credit score.
Changes to the original FICO scoring system include:
- Stronger penalties for those with late payments
- Better rewards for those with prompt payments
- Different types of debt are scored differently
Credit is now extremely difficult to secure, that is why if you’re looking to secure any big loans these days – it’s more important than ever that you know all the facts surrounding your credit report. Get familiar with how the new FICO credit scores are approximately determined by the following criteria:
- Payment history – 35 percent
- Types of credit used – 30 percent
- Amounts owed – 15 percent
- Length of credit history – 10 percent
- New credit – 10 percent
See how changes to the new FICO scoring system might have increased or decreased your score. Check your updated credit score for free today at GoFreeCredit.com, a Better Business Bureau accredited service, and take matters into your own hands. Plus checking your own credit does not hurt your score.