Have you heard about FICO scores ? that is the score to make the lenders make decision, however this formula was not implemented for sometime because those who made this FICO scores, Fair Isaac and the 3 credit reporting agent were disagreed with the new formula that was issued in 2009. However there is another company called TransUnion tried to use this formula in the beginning of the year 2009 and the other one called Equifax follow after. Some of other companies such as Experian also follow in the next few months afterwards.
However many people were still asking the question on how effective this formula is and how useful it is for you ?
People found out that Fico scoring system could make your score down even. This happened because the new formula is usually allow your debt to credit ratio. You can see when you have a debt and you compare it with your available credit, you will find out that the credit score you have would go down a little bit. This happened due to the economy crisis that made the global financial market become unstable. This monetary crisis also caused credit card company to even reduce the limit given to their customers and this what made unexpected impact to the credit score. Actually there are a lot of other things that could make this new score system not so favorably for customer especially if they only have one or two accounts and what more a lot of credit card companies or bank have to close down the account, this even give bigger impact to customer, beyond of what they figured before. However there is also a good thing about this New Fico Score system especially when you forget to pay small bills for doctor or pharmacy or for parking ticket, those will not really make big impact to your credit score.
Tags: Formula, Loans, mortgage, Mortgage Loans