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Paying your bills on time?

This is of great importance to most consumers.

And now, Fair Isaac Corporation, the company behind FICO scores, which measures creditworthiness, is planning on introducing new FICO models.

The company will incorporate credit bureau data, providing lenders with greater predictive capabilities in determining lending terms. The new models, which include the FICO Score 10 and the FICO Score 10-T, are also designed to reduce the number of loan defaults.

The type of data that will now make up the new FICO scores includes account balances over 24 months or more. Delinquencies and defaults will impact scores for a longer period of time, as a result. However, this also means that lenders will be able to better tell how hard people are working to reduce their debt. This could reward consumers who’ve chipped away at their debts in the hopes of a new line of credit.

New FICO models aren’t new and occur about once a year. They aren’t always implemented and the most widely used model is the FICO 8, according to Mortgage News Daily.

Fair Isaac promises a smooth transition from older models to the newly developed ones.

FICO scores range between 300 and 580.

FICO is used in the majority of all consumer credit decisions, including credit cards and auto loans.

It’s also possible that the new FICO 10 will be used in the mortgage process at some point in the future.

If you have any questions about credit scores as it relates to obtaining a home loan in the Seattle/Renton/Tacoma areas, don’t hesitate to contact us today.

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