My Credit Plan Blog

rss

My Credit Plan is the nation's leading FICO® Score improvement program with an average score improvement of 73 points! If you want to increase your FICO scores, set up an account today and start your credit score journey to higher levels! There is a minimal charge for services. My Credit Plan and its blog is operated by Family Financial Education Foundation, a 501 (c) (3) non-profit credit counseling agency. This blog offers many unique insights from direct research. My Credit Plan's blog and website are designed to help you find the correct answers to many of your questions, explain why, correct misinformation, and identify solutions to improve your FICO scores. Let’s go! (Information referenced on this blog must be sourced.)

Blog Feb 20201.png

Why FICO’s new scoring model may not mean much for consumers

 

By Sarah O'Brien (CNBC Reporter)

 

Every so often, a new credit scoring model hits the market — such as the recently announced FICO® 10 — and consumers are told their score may change.

 

The reality, though, is that not much shifts in the trenches: Banks, credit unions and other lenders that determine whether to loan you money or extend credit are generally slow to adopt new models.

 

“FICO can put out any product they want, but if it doesn’t get used, it has no relevance for consumers until that happens,” said Al Bingham, a credit expert and author of “The Road to 850.”

 

FICO 10 is arriving about five years after FICO 9 — which dropped five years after FICO 8′s release. While FICO did not disclose usage of those two models, neither of them are predominantly employed by lenders, although use is picking up, said Bingham and Ulzheimer.

 

The slow adoption is partly because in the lending industry — the overseer of roughly $14 trillion in consumer debt — most decisions for mortgages, and for some other consumer loans or credit, are based on the so-called “classic” FICO score that’s been in use for more than two decades.

To read Sarah's entire article, please click on the following link:

https://www.cnbc.com/2020/02/10/why-ficos-new-scoring-model-may-not-mean-much-for-consumers.html

Showing 0 Comment


Comments are closed.