It may have escaped your attention while you were working from home as a result of the corona virus pandemic, but FICO released its newest credit scoring models in recent months.
FICO (Fair Isaac Corporation) is the producer of the most commonly used credit scoring algorithms. Some version of a FICO score is used in 90% of the lending decisions made in the United States.
These new scoring models will look at information like your account balances over the last two years and personal loans that you may have taken out in much more detail than previous scoring models.
If you apply for credit from a source that is using FICO 10, your score may be about 20 points different from what it had been under previous scoring models.
If you’re looking to get out of wherever you have been sheltering during the pandemic and looking to become a new homeowner, the new scoring model is not likely to have any impact on your ability to secure financing for that new residence. Mortgage lenders are conservative and most are still utilizing FICO credit scoring models that are several years old.
Here is a link to recent Newsday article where our company President comments on the new scoring models use in the mortgage industry: