Will the Revised FICO Scoring System Help or Hurt Me?

The FICO score has recently undergone a revised system that is predicted to help some borrowers and hurt others. The specific details inherent in the revisions have yet to be revealed; however, some basic information has been released to give potential borrowers an idea of what they can expect.

The Good

For those who are looking for information on how the revised FICO system can possibly help them, here are a few details to consider:

    • 1-timer mistakes won’t hurt you. If you fail to make a payment on your credit card one time then it will be forgiven. This is a great benefit for those who are never late because prior to this change a mistake like this could cost you up to 100 points. Now, you have a chance to make this one mistake. However, if it happens more than once, you’ll suffer even greater repercussions.
    • Late payments will be weighed differently. Now, if you have a late payment for $50 and one for $1,000, they will be looked at differently. You won’t have to suffer as much for the lower amount as you will the higher denomination.

The Bad

Now let’s look at a few details of the revised FICO system that could have a negative impact on borrowers:

  • Authorized users are no longer included. Depending on how this is viewed, it could either be bad or good. However, it makes the “bad” list because one must assume that not too many people are eager to add their name as an authorized user for credit that could negatively affect their FICO score. So the people who are most likely to be affected are those who could have benefited from being included in the other person’s credit. For instance, if a husband who jointly owns a credit card with his wife cannot have the credit card information noted on his report, his score could go down.

There are more changes sure to come with the revised FICO system. But as long as you stay posted on what those changes are, you can continue to make the efforts necessary to maintain a good FICO score.