Jump to Navigation

The way credit scores are calculated will be changing this summer

The way that the Fair Isaac Corporation (FICO) tallies your credit score is slated to change soon. The company announced that it may result in individuals who carry credit card debt seeing a drop in their FICO scores by 20 points or more pretty soon.

FICO took advantage of announcing the change to point out that the average American has a 703 credit score.

The company announced that its new FICO 10 model will take into account all of the balances that a consumer has carried during the past 24 months. This will result in individuals who traditionally carry balances from one month to the next suffering a drop in their credit scores.

FICO expects the gap between individuals with poor credit scores, which they consider to be below 580, and good ones, or between 670 and 739, to widen because of this. The company noted that creditors who more recently carried higher balances will be most adversely affected by the change in how credit scores are calculated.

At least 110 million consumers' are expected to see their credit scores drop once the FICO 10 model is fully rolled out this summer. At least 40 million debtors will see their credit scores increase by 20 points once the new formula starts being used though.

Market analysts point out that this is consistent with what has typically happened when previous revised models have been rolled out. They note that individuals who are considered high risk generally see their scores drop whereas reliable consumers are rewarded for maintaining a good payment history.

Individuals who carry credit card debt put themselves at risk for missing payments. If consumers miss too many of them, then their debt goes into collections. Bill collectors can get quite aggressive when trying to collect what you owe. They may repeatedly call your home and job until you give them what they want.

If creditor calls have started coming in and you're being threatened with further legal action, then you may want to consult with an attorney. Your Cleveland lawyer can advise you of the many options that you have available to you here in Tennessee to alleviate yourself of your debt.

No Comments

Leave a comment
Comment Information

What's Your Situation:

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Subscribe to This Blog's Feed Visit Our Bankruptcy Website

Our Office Location:

Richard Banks & Associates

393 Broad Street, N.W.
Cleveland, TN 37364-1515
Map & Directions

Phone: (423) 244-0009
Toll Free: (866) 596-8527
Fax: (423) 478-1175

FindLaw Network

Privacy Policy | Business Development Solutions by FindLaw, part of Thomson Reuters.