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New Credit Score Formula Will Help Good Borrowers

News Flash: Your Credit Score May Soon Get a Boost

Fair Isaac, the company that calculates consumer credit ratings for lenders, is rolling out a new formula that will do a more accurate job at sorting out "good-risk" borrowers from "bad-risk" ones. If your score is around 680 to 690, the new formula could push your score up by as much as 25 points and your score would go from fair to good standing. This means that you would qualify for better interest rates. This will take a few months to go into full effect, but these are the highlights of Fair Isaac's new system.

  • If you have a credit history of 10 years or more, one big mistake from a long time ago won't hurt your score as much as it used to.
  • Multiple credit inquiries in a short period of time won't be as important to your overall score, but the 45-day window rule still applies.
  • Your score should increase if you have a good credit history and have proved you can manage different types of credit. On the other hand, you could lose points if your balances are close to the maximum on your lines of credit.

Source

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