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December 21, 2007
Default Lines: The New Math of Credit Scores
The three major credit bureaus could implement Fair Isaac Corp.'s new credit scoring system as early as spring 2008. The new system, FICO 08, was developed in response to lenders' demands for a better way to gauge borrower risk amid rising mortgage and auto loan delinquencies. FICO 08 continues to assign consumers scores between 300 and 850 and take into consideration their debt loads, payment histories, recent accounts and inquiries, type of credit and length of credit history; but it now will give higher scores to consumers making timely payments on different types of loans and lower scores to those who have used much of their available credit or have multiple delinquent accounts.
Posted by S. Germain at December 21, 2007 08:09 AM