In recent weeks, news about FICO has been everywhere!

The lawsuit filed by FICO against Experian, TransUnion, and VantageScore Solutions has been partially dismissed, but will likely continue later on this year. In addition, FICO announced that FICO 08, its most recent credit score will be available in all three of the credit reporting agencies in August 2009! This means that Experian has agreed to finally install and provide credit scores (several months after Equifax and TransUnion have.)

How is FICO 08 different than the old FICO?

1. Consumers who have a large amount of credit card debt or are highly utilized will likely see lower FICO 08 scores. This is because of the added importance of credit card debt built within the model.
2. Authorized Users:  Adding yourself onto the credit card of another person in an attempt to “piggyback” your way to a better score will be impossible sooner rather than later.
3. Benefits! A benefit to consumers is FICO 08’s logic, which ignores very low dollar collections, commonly referred to as nuisance collections. Consumers who are seeing their scores lowered by collections with an original amount less than $100 will see immediate benefit with FICO 08.

Now it’s just a matter of time before banks and lenders accept and start implementing the new models….it looks like momentum is building and hopefully won’t take too long.