FICO score changes in 2008 | NextGen, more predictive variables
FICO score changes in 2008
You may see a significant change in your FICO credit score this year once Fair Isaac Corporation has fully rolled out the scoring revision it calls NextGen. Fair Isaac says the new scoring model, which retains the old 300-850 score range, has 80 predictive variables, more than twice the number in its Classic FICO model. The variables are used to create many multidimensional mini-models, the company says. The company also says it is increasing the number of segments into which consumers fall, from 10 in he Classic model to 18 in the new one. We’re guessing that one certain result will be to make the scores even less transparent to consumers. The model was also to contain a much-publicized change in the way that individuals who are not the actual owner of a credit card owner, but are “authorized users,” are treated. In the past, individuals could be added as authorized users and get the benefits of the good credit history of the card holder, a practice called “piggybacking.” That is to end when NextGen goes to the three credit bureaus. Experian was to be the first to get the new scoring last September, but its activation has been delayed. Equifax and TransUnion are scheduled to receive NextGen sometime this year.
So until the rollout is complete, the authorized user loophole, which some credit repair firms have abused, is still in. Understand, the benefits of being an authorized user can be filtered out of the FICO scores by lenders. Fair Isaac says that its data shows that 30% of the population has an authorized user on their credit reports, so as many as 60 to 75 million people might be affected by the change.
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Tags: authorized user loophole, FICO, FICO score changes, NextGen