Debt Consolidation Depot
Debt Consolidation & Financial Information Resource Center
July 19, 2004
New FICO Score eases bad credit repair as FICO Corp. 'relaxes' scoring
model (by bad-credit-advisor.com)
(PRWEB) -- Bad credit folks who sign up for Credit Counseling or Debt
Consolidation plan hear this a lot: "your Beacon score is too low...", "you
must improve your FICO score..." Little do they know that their FICO score
may've improved already without them noticing. Every 5 points up counts!
According to Fair Isaac Corporation (NYSE:FIC), the new FICO is a more
predictive and consumer friendly score now...
And forget about the Beacon score - the name is NextGen now! What? You
didn't know? According to research done by Bad Credit Advisor.com, it's
true, most people don't know that three major credit agencies TransUnion,
Experian and Equifax are now using the new and more friendly NextGen scores.
How people with bad credit history can benefit from these new and improved
scores? They can get better rates. And more people will get loans, and for
larger amounts... It would also help them to repair credit!
FICO NextGen scores go easier on Sub-prime loan seekers!
On their web site, FICO Corp. states: [new scores "... allow for more
scoreable files (credit reports), updated treatment of mortgage and auto
inquiries to better reflect consumer rate-shopping (low interest rates), and
more consumer-friendly treatment of finance trades(!), and low-balance
collections(!) and public records(!)."
Why these improvements? Bad Credit Advisor thinks that FICO Corp. is trying
to meet sub-lenders requirements for more applications processed and better
interest rates offered. With such low rates, sub-lenders are making all the
money by giving 'great' deals to people with bad credit history. The new
scores let more people in the range of allowed FICO scores, thus creating
more business for lenders and keeping the housing industry strong.
This thought may be very close to the real thing... as FICO Corp. states on
their web site: "Lenders want to price appropriately, and lend safely, while
making more credit available to more people and effectively managing their
operations costs."
In layman terms, the NextGen scores loosen up scoring criteria so more
people can get better credit rating and borrow more money. But make no
mistake, FICO Corp. claims these new scores are even more predictable -
which works for lender advantage.
Plus, the latest score version NexGen 2.0 allows people with short or
dormant credit history to get loans!
So, does this all mean that we can now have more unpaid medical bills, have
more inquiries on car and mortgage loans, get a car loan at the age of 18,
get better interest rates after a recent bankruptcy ...?
I guess we are to find out ... when we'll see more bankruptcies in the years
to come. Or will we?
Bad Credit Advisor suggests we remain calm and keep our credit score as high
as possible. On a serious note, they said, this relaxing in credit scoring
presents great opportunity to dispute more items on your credit report than
was possible before and improve your credit score more substantially!
(Disclaimer: this article is an opinion of bad-credit-advisor.com and not of
Fair Issac Corporation)
© 2004 DebtConslidationDepot.com