Credit scores go up, and they come down. We all understand that fact, but usually, there’s a direct cause and effect when your FICO Score hops or drops; i.e. you just maxed out all of your credit cards at the mall.

However, your score could soon be going up – or down – for little fault of your own! According to FICO, a new scoring model could create waves among consumers who see their scores on a roller coaster ride soon.

FICO Scores – a three-digit number that gauges your financial behavior as credit risk – will soon give more credence to your debt levels, as well as emphasize reporting of personal loans.

With past FICO scoring models, your payment history (the biggest factor that goes into calculating your FICO), was based on an overall “snapshot.”

But with the new scoring model, more data will be collected and analyzed to factor into your score, including the historical trend of your payment history over time. That includes account balances going back up to 24 months, which will give FICO a lot more to base your score on.

Get ready, because depending on your credit usage and payment history, your new FICO score could rise or fall by up to 20 points – a new paradigm that will affect up to 80 million consumers, according to Dave Shellenberger, VP of Product Management at FICO. And 100 million Americans are expected to see just a “modest” score change.

Thank you to Blue Water Credit for providing this article.  If you have questions on how your credit score can/will affect your mortgage interest rate, call me today.