NEW YORK — FICO, the system which calculates credit scores for about 110 million Americans, is changing the way it assigns scores.
The change will make it tougher to get a higher score if you’ve missed payments or have rising debt.
“FICO 10” goes into effect summer 2020. Lenders will have a choice on whether or not to adopt the new scoring model.
FICO 10 is going to look at risk factors a lot more harshly.
Personal finance expert Tiffany Aliche of “The Budgetnista” discusses what you can do to improve your credit.
Pay more than the minimum and start making an extra payment, if possible.
Start utilizing just 30% of your available credit: If you have a $10,000 limit, you should carry a balance of no more than $3,000.
Pay your bills on time: Delinquent payments will have a larger effect on your overall score than before. If forgetfulness is part of the problem, set up automatic payments.
Get current and stay current: Pull credit reports and make sure nothing has fallen through the cracks like a medical bill.
For more information on The Budgenista and transforming finances, head to the following links: