Search

Trending Searches chaseAmex sapphire citicapital oneCiti premier DeltaJourney Spark

Generic filters
Filter







Trending Searches E-WalletSmart card0% APRChase BusinessGas

Select Page
FREE PDF GUIDE

FROM DREAM TO HOME

FREE PDF GUIDE

HOW TO TACKLE CREDIT CARD DEBT

The New Fico Scoring Model: Fico 10/FICO 10T– What’s Changing?

- Jan 29, 2020 credit, Credit Scores0 comments

Fair Issac and Co., the company that created the Fico score, announced in a recent press release that they will make available their newest scoring model Fico 10 this upcoming summer.

Your Fico score is one of the most important assets you have in your financial life. Therefore, when Fico makes changes to the scoring model it’s always big news! Fico estimates that over 80 million consumers will see more than a 20 point change to their credit score in either direction with the new Fico 10 scoring model! In this post, we will discuss what Fico claims to be changing with the new model so you can know what to expect once the score is released.

Trended Data

The big change will be Trended Data. Until now, no Fico score calculated trended data as part of the scoring model. With the new Fico 10T, trended data will be included.

What Is Trended Data?

Trended data gives lenders the full balance picture from the last 24 months, rather than just the last month’s data.

For example, Let’s say, you maxed out your credit cards and then slowly started to climb out of the debt. For the last 6 months, your debt started to fall from month to month, and you’re currently only 60 percent maxed out. Your credit utilization will be currently at 60%, but it’s trending downwards.

Your friend has lately gotten a terrible shopping habit, and over the last six months is slowly building up extreme balances. He/she is currently hitting 60% utilization on all his/her credit cards. His/her credit utilization is the same 60% as yours, but the difference is that s/he is trending upwards.

Now when you both apply for a new credit card, who is a more risky borrower? You or your friend? The answer is most likely your friend. That is because you are slowly climbing out of the mud, but your friend is currently sinking into the mud…..

With the current Fico scoring models, you and your friend will score the same, since you’re both at 60% utilization. With trended data, this will change. Fico 10T will not only look at the current utilization. It will look back at your balance history and summarize you’re activity of the last 24 months as well.

Why It Matters

The fact that Fico did not calculate trended data in the current scoring models has many times been to the advantage of the consumer. Even if a consumer had a big purchase once or twice, or for whatever reason needed to max out their credit cards, as long as that balance was paid up before applying for a mortgage or credit card, etc., there were no problems. Fico only calculated the current balance. But with the new Fico 10T scoring model, high balances may affect you for a full 24 months! For many consumers, this will make it take much longer for them to put their dirty deeds passed behind them.

Personal Loans

With the new FICO 10 scoring model, personal loans will be viewed as a negative factor at least in cases where the consumer continues to accumulate credit card debt after obtaining the payoff loan.

Nothing Is Happening So Fast

Even if Fico is already releasing the new scoring model this summer, let’s remember that lenders do not adapt to the new models so fast. The previous scoring model, Fico 09, which was already released in 2014, is still not in use by most lenders. And when it comes to mortgages, the even older Fico 04 model is still in use. So as things are trending, you can still live a nice amount of healthy years before these changes have any effect on your financial life.

If you’ve got any questions about the new Fico 10/fico 10T model or about anything discussed in this post, please leave a comment and I will respond.

Was this article helpful?

Sam Sam has nearly a decade's worth of experience educating his many readers on everything credit. Sam spends his days checking out credit cards for a full report, from the minute benefit details to the shebang of welcome bonuses. Plus studying the ins and outs of building proper credit. It’s his favorite pastime and he loves sharing it with others.

Leave A Comments

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Comments

Recent Posts

Follow us

Click here to subscribe to
our WhatsApp channel

Todays
best offers

Chase Sapphire Preferred

Wow! Earn 100,000 points after spending $4,000 within the first 3 months.

more info

Citi Premier Card

Earn 80,000 points after spending $4,000 within the first 3 months.

more info

United Business Card

Earn 75,000 points after spending $5,000 within the first 3 months.

more info

Amex Platinum

Earn 100,000 points after spending $6,000 within the first 6 months. Plus earn 10 points at restaurants worldwide and when you Shop Small in the U.S. on up to $25,000 in combined purchases within the first 6 months (terms apply).

more info

You May Also Like

The 5 Most Important Factors In A FICO Score

The 5 Most Important Factors In A FICO Score

Every self-proclaimed guru on Google has “5 reasons why blah blah blah”.  But now I’m about to give you 5 REAL factors that FICO looks at when calculating your credit score.  Being that, as per FICO, as much as 90% of lending decisions are made using the FICO scoring...

read more
The Sad Truth About Medical Collections

The Sad Truth About Medical Collections

The other day, while I was praying, a beggar passed by asking for Tzedakah. I threw in a dollar. The beggar was excited and gave me the following blessing; “May you never have any doctor bills or hospital bills”. I thanked him but did not put much thought to what he...

read more
Rapid Rescore: How It Works And Everything You Need To Know

Rapid Rescore: How It Works And Everything You Need To Know

When applying for a mortgage, it is very important for you to have your credit file up-to-date. That’s why most mortgage brokers and lenders offer a service called a rapid rescore. For example, if you’ve had high balances on your credit cards and already paid them up,...

read more
ExtraCredit By Credit.com – Full Review

ExtraCredit By Credit.com – Full Review

Their tagline is “Credit is complicated. ExtraCredit is not”. So true. I’m sure you’re ready to hear what ExtraCredit is all about! ExtraCredit is an online software slash website that gives you access to monitor your credit score and credit...

read more
Will Opening A New Credit Card Affect My Credit Score?

Will Opening A New Credit Card Affect My Credit Score?

Some questions don’t have a straight answer. This question is one of them.  There is no one size fits all answer to this question of what effect opening a new credit card will have on your credit score. But here in this post, I will go through the different...

read more
Credit Utilization – 11 Things You Must Know

Credit Utilization – 11 Things You Must Know

One of the biggest factors credit models look at when calculating a credit score, is credit utilization. Credit utilization is how much of your credit line you utilize.  Let’s imagine your dad gives you $100 per month for allowance.  If he comes back 10 months...

read more

Download link sent
succesfully

Got it *please check your promotional inbox

Error sending download link

Try Again