We'll be discussing the FICO(r), score 9, and explaining what it all means. We'll also be discussing MyFICO, alternative options for a score, and how renting payments can affect credit scores. Before we get into all the details, let us first talk about the three factors that influence your FICO(r). You will be curious to learn about each one.
FICO(r). Score 9
While FICO(r) Scores have been around for over 25 years, they are perhaps the most commonly used and widely known. Lenders first began using FICO(r) Scores in 1989. Many things have changed since then: consumer requirements, data reporting practices and credit-granting requirements. This is what you need to know regarding the credit scoring system. As always, remember to keep your score!
The FICO(r) Score 9 has several changes compared to its predecessors. Medical debt is no longer included in calculating your score, so if you've received a bill from a doctor for surgery, you'll likely be less affected by your score than if you've gotten a credit card bill in the mail for the same procedure. Because collections do not affect your rental history you can start building credit history by paying rent.
Impact of rental payment history on your credit score
While you might not think that your rental payments affect your credit score, they do. Credit bureaus provide this information. The credit scoring process considers whether you've paid on-time or not. Credit scoring models consider both your rental payment history as well as your credit history. There are important facts you need to know about credit reporting data. Read on for more information.
Experian conducted a recent study and found that 75% experienced an increase in credit scores by including rental payments on their credit reports. This increase can be between 11 and 29 percent. It will not seem like much at first, but it will really help. Although it won't have an immediate effect, the change can significantly improve your credit score. Learn more about the impact of rental payments on credit scores.
MyFICO
If you have a low credit score you might wonder what MyFICO score 9 is. Access it is free and easy to get from your credit card provider, lender or credit counselor. Your score can be affected by a negative credit history. You can however dispute it. There are still ways to improve credit scores and keep interest rates down. Listed below are some ways to do this.
Medical Collections: This is a change from previous FICO scores where medical debt was not considered a major factor in determining credit scores. According to the Consumer Finance Protection Bureau the impact of medical collection on credit scores is less than that of other types. Medical collection accounts should not be ignored. Although medical collections are taken into consideration by the new FICO formula, it is not clear how much. The impact of medical collections on your score is not as severe as other types of debts.
You have other options for getting a FICO (r) Score
FICO(r), or credit scores, have been around for more than 30 years. They are simply a measure of your creditworthiness. FICO(r), 9, is the latest version. This was developed to make it easier for consumers to get credit. FICO(r) 9 takes into account rental history, payment history, medical debt, and makes these factors less important. There are other options to get a 9 FICO(r), including student loans, home equity loans and debt consolidation loans.
FICO(r), 9 might seem like a huge change, but there are ways you can improve your score. One way to boost your score is to make sure you pay your bills on schedule. Your FICO score will rise by 25 points if you do this. For a small fee, LevelCredit will allow you to access 24 months of your past payments. Remember that not all lenders yet use the newer model so you might have to wait a bit before your FICO score is available.