FICO 08 system is the newest version of the algorithm used by the Credit rating agencies to determine the credit behavior of consumers. Credit score improved over time may suddenly have to update itself according to changing times.
The earlier loop holes are seemingly removed.
1. Now a $100 bill in late payment will not drastically affect your credit score. The overall view about your credit lines will be taken into consideration.
2. The ‘piggy backing’ technique used by credit repair agencies to get their clients listed as authorized users on someone else’s credit card with a strong history is no longer beneficial with the new system in place
3. The overall credit limit of an individual will carry more importance than ever before. So now please do not max out your credit limits. This will severely affect your credit score and your attempts to raise credit score.
4. The new system will track your behavior more closely. So a new consumer durable purchase will be taken note of.
What it means that the rules of removing negatives off your credit report have been changed. You need to be more vigilant about the credit cards and the limit that they are carrying. More and more credit card companies are unilaterally reducing credit limits or increasing the interest rates.
There is a new bill introduced in the congress to counter such a trade practice, but till then you will have to face this lacuna of the algorithm that does not look into unilateral policy decisions of the Banks wherein the innate consumer behavior has not changed. And still he has to pay the price.
Please click here to check out more about how to improve credit score in 2009 starting Now.
This is my ebook and this is my website… not any affiliate.
Leave a Reply