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FICO Scores Are Changing. Will Your Credit Score Go Down?

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New updates to the way FICO credit scores are calculated could make it more difficult for some Americans to get loans. With the changes, you could see your credit score go down — or up.

FICO scores are the most commonly used type of credit score in the U.S. and are used by lenders to determine whether to extend credit to someone applying for a loan. Once the revision is implemented, you’ll want to get a free check of your credit score to see if you’ve been affected.

What’s changing?

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The new version will take into account credit card usage over a two-year period.

Fair Isaac Corp., the company responsible for FICO scores, has announced a change that will penalize consumers if they allow their debt levels to rise, or if they fall behind on their loan payments, as first reported by The Wall Street Journal.

The update will factor in how a consumer uses credit cards over a 24-month period — and if you tend to carry high balances, your score will take a hit. The new FICO scores also give more weight to unsecured personal loans, which could hurt some borrowers.

Under the new scoring criteria, consumers with good credit scores — 680 or higher — will likely see an increase in their scores if they stay on top of their loan payments.

However, those with fair or poor credit scores — 600 or lower — who miss payments or accumulate debt will see bigger declines in their scores than under previous FICO versions.

What’s the impact?

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FICO says a minority of consumers will see major changes in their scores.

FICO officials say the majority of consumers, roughly 110 million, will see changes in their credit scores of less than 20 points, either up or down.

Another 80 million will see bigger swings — in either direction.

The changes will widen the gap between consumers who are already considered to be good or bad credit risks, and will likely lead to a shift in the average FICO score, which hit a record high of 703 in 2019, according to an annual report from the credit bureau Experian.

In a news release, FICO says it expects its new system will result in an up to 10% reduction in credit card defaults and as much as a 17% decline in defaults by new mortgage borrowers.

The new scoring model marks a stark reversal from FICO changes in previous years, which aimed to help build scores for people with little or no credit history, and remove certain pieces of negative information — like civil judgments and tax liens — from many credit reports.

It’s unclear when lenders will begin using FICO’s new model. But if you’re not sure about the current status of your credit rating, you’ll want to take a free peek at your credit score to know where you stand.

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Bad Credit

Swimming Pool Loans: Finance with a Personal Loan

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Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders, all opinions are our own.

The average cost of installing a pool in the U.S. is about $35,000, according to HomeGuide. If you’d like to get a pool but don’t have the cash, a personal loan could help you cover the cost.

Here’s what you should know about swimming pool loans:

Personal loans for swimming pools

A personal loan can be used for a wide variety of reasons — including swimming pool installation. Here are Credible’s partner lenders that offer personal loans for swimming pools:

Avant

Avant offers personal loans for up to $35,000, as well as fast loan funding. If you have fair credit and would like to finance a pool installation, Avant could be a good choice.

  • Rates: 9.95% – 35.99% APR
  • Loan terms (years): 2, 3, 4, 5*
  • Loan amount: $2,000 to $35,000**
  • Fees: Origination fee
  • Discounts: Autopay
  • Eligibility: Available in all states except CO, CT, HI, IA, LA, NV, NY, SC, VT, and WV
  • Min. income: $24,000
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. credit score: 580
  • Time to get funds: As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
  • Loan uses: Debt consolidation, emergency expense, life event, home improvement, and other purposes

Avant personal loans review

*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.

**Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33.

Axos

Axos personal loans range from $5,000 to $35,000 and can be used for home improvement and more. Keep in mind that you’ll likely need very good credit to qualify for an Axos loan.

  • Rates: 9.95% – 35.99% APR
  • Loan terms (years): 2, 3, 4, 5*
  • Loan amount: $2,000 to $35,000**
  • Fees: Origination fee
  • Discounts: Autopay
  • Eligibility: Available in all states except CO, CT, HI, IA, LA, NV, NY, SC, VT, and WV
  • Min. income: $24,000
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. credit score: 580
  • Time to get funds: As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
  • Loan uses: Debt consolidation, emergency expense, life event, home improvement, and other purposes

Avant personal loans review

*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.

**Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33.

Best Egg

Best Egg offers personal loans up to $35,000, with highly competitive fixed interest rates. Just remember that you’ll need good credit to qualify for the lower end of these rates.

  • Rates: 5.99% – 29.99% APR
  • Loan terms (years): 3, 5
  • Loan amount: $5,000 – $35,000
  • Fees: Origination fee
  • Discounts: None
  • Eligibility: Available in all states except DC, IA, VT, and WV
  • Min. income: None
  • Customer service: Phone
  • Soft credit check: Yes
  • Min. credit score: 640
  • Time to get funds: As soon as 1 – 3 business days after successful verification
  • Loan uses: Credit card refinancing, debt consolidation, home improvement, and other purposes

Best Egg personal loans review

Discover

If you have good to excellent credit and are looking for a longer repayment term, a personal loan from Discover might be a good option. Discover offers loans ranging from $2,500 to $35,000, with terms from three to seven years.

  • Rates: 6.99% – 24.99% APR
  • Loan terms (years): 3, 4, 5, 6, 7
  • Loan amount: $2,500 – $35,000
  • Fees: None as long as you pay on time
  • Discounts: None
  • Eligibility: Available in all 50 states
  • Customer service: Phone
  • Soft credit check: Yes
  • Min. credit score: 660
  • Time to get funds: Funds can be sent as soon as the next business day after acceptance
  • Loan uses: Auto repair, credit card refinancing, debt consolidation, home remodel or repair, major purchase, medical expenses, taxes, vacation, and wedding

Discover personal loans review

LendingPoint

You don’t need excellent credit to get a loan from LendingPoint. If you’re looking for bad credit personal loans, LendingPoint might be a good option.

  • Rates: 15.49% – 35.99% APR
  • Loan terms (years): 2, 3, 4
  • Loan amount: $2,000 to $25,000
  • Fees: Origination fee
  • Discounts: Autopay
  • Eligibility: Available in all states except CO, CT, HI, MA, MD, NV, NY, VT, WV, and WY
  • Min. income: $35,000
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. credit score: 585
  • Time to get funds: As soon as the next business day
  • Loan uses: Home improvement, consolidate debt, credit card refinancing, relocate, make a large purchase, and other purposes

LendingPoint personal loans review

LightStream

A division of SunTrust Bank, LightStream offers loans up to $100,000, plus repayment terms ranging from two to 12 years for home improvement. This gives you more time to pay off your pool compared to other personal loan lenders.

  • Rates: 3.99% – 19.99% APR
  • Loan terms (years): 2, 3, 4, 5, 6, 7 (up to 12 years for home improvement loans)
  • Loan amount: $5,000 to $100,000
  • Fees: None
  • Discounts: Autopay
  • Eligibility: Available in all states except RI and VT
  • Min. income: Does not disclose
  • Customer service: Phone, email
  • Soft credit check: No
  • Min. credit score: 660
  • Time to get funds: As soon as the same business day
  • Loan uses: Credit card refinancing, debt consolidation, home improvement, and other purposes

LightStream personal loans review

LightStream disclosure

Marcus

Marcus personal loans come with absolutely no fees — no origination fees, prepayment penalties, or even late fees. And if you make your payments on time and in full for a year, you have the option of skipping a payment with no interest accruing.

  • Rates: 6.99% – 19.99% APR1
  • Loan terms (years): 3, 4, 5, 6, 7
  • Loan amount: $3,500 to $40,0002
  • Fees: None
  • Discounts: None
  • Eligibility: Available in all states except MD
  • Min. income: $30,000
  • Customer service: Phone
  • Soft credit check: Yes
  • Min. credit score: 680
  • Time to get funds: Many Marcus customers receive funds in as little as five days
  • Loan uses: Credit card refinancing, debt consolidation, home improvement, and other purposes

Marcus personal loans review

1Rate reduction available for AutoPay.

2You may be required to have some of your funds sent directly to pay off outstanding unsecured debt.

3After making 12 or more consecutive monthly payments, you can defer one payment as long as you have made all your prior payments in full and on time. Marcus will waive any interest incurred during the deferral and extend your loan by one month (you will pay interest during this extra month). Your payments resume as usual after your deferral. Advance notice is required. See loan agreement for details.

PenFed

If you only need to borrow a small amount, PenFed could be a good choice. With PenFed, you could get anywhere from a $600 up to $20,000 personal loan with loan terms from one to five years.

  • Rates: 6.49% – 17.99% APR
  • Loan terms (years): 3, 4, 5
  • Loan amount: $600 to $20,000 (depending on loan term)
  • Fees: None
  • Discounts: None
  • Eligibility: Does not disclose
  • Min. income: Does not disclose
  • Customer service: Phone, email
  • Soft credit check: No
  • Min. credit score: 650
  • Time to get funds: 2 to 4 business days after verification
  • Loan uses: Debt consolidation, home improvement, transportation, medical, dental, life events

PenFed personal loans review

Prosper

Prosper is a lending marketplace where loans are funded by individual investors. Prosper loans come with three- or five-year terms and are available for up to $40,000.

  • Rates: 6.95% – 35.99% APR
  • Loan terms (years): 3, 5
  • Loan amount: $2,000 to $40,000
  • Fees: Origination fee
  • Discounts: None
  • Eligibility: Available in all states except IA, ND, WV
  • Min. income: None
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. credit score: 640
  • Time to get funds: On average, within 5 days of accepting your offer
  • Loan uses: Debt consolidation, home improvement, vehicles, small business, new baby expenses, and other purposes

Prosper personal loans review

SoFi

SoFi offers $5,000 up to $100,000 personal loans that come with no origination fees, closing costs, or prepayment penalties. SoFi also offers unemployment protection, free financial planning sessions, and career coaching.

  • Rates: 5.99% – 18.83% APR
  • Loan terms (years): 2, 3, 4, 5, 6, 7
  • Loan amount: $5,000 to $100,000
  • Fees: None
  • Discounts: Autopay
  • Eligibility: Available in all states except MS
  • Min. income: Does not disclose
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. credit score: Does not disclose
  • Time to get funds: 3 business days
  • Loan uses: Solely for personal, family, or household uses

SoFi personal loans review

Upgrade

An Upgrade personal loan could be a good choice if you’re building credit or looking for fast loan approval. Upgrade offers loans up to $35,000.

  • Rates: 7.99% – 35.97% APR
  • Loan terms (years): 3, 5
  • Loan amount: $1,000 to $35,000 ($3,005 minimum in GA; $6,005 minimum in MA)
  • Fees: Origination fee
  • Discounts: Autopay
  • Eligibility: Available in all states except DC, IA, WV
  • Min. income: Does not disclose
  • Customer service: Email
  • Soft credit check: Yes
  • Min. credit score: 580
  • Time to get funds: Within a day of clearing necessary verifications
  • Loan uses: Debt consolidation, credit card refinancing, home improvement, and other purposes

Upgrade personal loans review

Upstart

With Upstart, you could get a $1,000 up to a $50,000 personal loan. In addition to your credit, Upstart looks at over 1,000 non-traditional credit indicators to help get you approved for a personal loan — which means those with less-than-stellar credit might still qualify for a loan.

  • Rates: 8.13% – 35.99% APR4
  • Loan terms (years): 3 to 5 years4
  • Loan amount: $1,000 to $50,0005
  • Fees: Origination fee
  • Discounts: None
  • Eligibility: Available in all states except IA and WV
  • Min. income: $12,000
  • Customer service: Phone, email
  • Soft credit check: Yes
  • Min. credit score: 600

    (in most states)
  • Time to get funds: As soon as 1 – 3 business days6
  • Loan uses: Payoff credit cards, consolidate debt, take a course or bootcamp, relocate, make a large purchase, and other purposes

Upstart personal loans review

4The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 15% and 36 monthly payments of $33 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

5This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website.

6If you accept your loan by 5pm EST (not including weekends or holidays), loan funds will be sent to your designated bank account on the next business day, provided that such funds are not being used to directly pay off credit cards. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.

See: What You Can Use a Personal Loan For

How to calculate the total cost of your swimming pool loan

How much you’ll need to borrow to cover your swimming pool will depend on the type of pool you choose.

Here are some common price points to consider before estimating the overall cost of a swimming pool loan:

  • Above-ground swimming pool: $1,500 to $16,000 on average
  • In-ground swimming pool: $3,000 to $100,000
Tip: The total cost of your loan will also be driven by the interest rate and any fees charged by the lender.

Having a good credit score could also help you qualify for a lower interest rate, so it’s a good idea to make sure your credit is as good as it can be before applying.

Before you borrow, estimate how much you’ll pay for a swimming pool loan using our personal loan calculator below:

Enter your loan information to calculate how much you could pay

Total Payment
$

Total Interest
$

Monthly Payment
$

With a
$
loan, you will pay
$
monthly and a total of
$
in interest over the life of your loan. You will pay a total of
$
over the life of the
loan.


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Compare rates without affecting your credit score. 100% free!

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HELOCs vs. personal loans for pools

In some cases, a Home Equity Line of Credit (HELOC) might be a good choice to pay for pool installation. Here are some pros and cons of both HELOCs and personal loans to help you decide:

  HELOCs Personal loans
Pros
  • Often have lower interest rates
  • Can use credit line multiple times
  • Quick application
  • Typically unsecured (doesn’t require collateral)
  • Few or no fees (depending on the lender)
Cons
  • If you stop payments, you could lose your collateral (i.e., your home)
  • Can come with upfront costs
  • Typically higher interest rates
  • Generally need very good credit to qualify
Best for
  • Borrowers with a good amount of equity in their home
  • Borrowers with good credit who qualify for lower rates

Learn More: How to Decide Between a Personal Loan and a Personal Line of Credit

Things you should know before building a pool

On top of paying for a pool, there are a few points to keep in mind before you take the plunge. Here’s what to consider first:

Pools won’t necessarily boost your home value

Unlike a bathroom addition or kitchen remodel, adding a new pool won’t necessarily add value to your home. If you move, you’ll be leaving it behind and likely won’t recoup the full cost — if any.

Also keep in mind that if you sell your home, buyers might not be thrilled with the added costs and safety risks that come with a home swimming pool.

The typical pool builder will recoup about $20,000 to $32,000 in value compared to an average $50,000 expense, according to HGTV.

In addition to paying for the pool, there may be additional monthly costs

Pool costs don’t stop after building and filling it up for the first time. There are a handful of common, ongoing costs related to owning a pool. The cost is around $3,000 to $5,000 per year, according to HomeAdvisor. These costs include:

  • Heating-related electricity costs
  • Pool chemicals
  • Cleaning services
  • Ongoing maintenance
  • Winterizing
  • Filling and adding water
  • Additional home insurance costs

Learn More: Where to Get a $10,000 Personal Loan

Some pool dealers may offer their own financing — but you should compare your options

Some pool-building companies offer their own financing. However, it’s a good idea to compare this with other loan options you might qualify for since you might get a much lower interest rate with another lender.

If the pool dealer offers a better deal, it might be a good choice. Just remember that you’re under no obligation to finance through your pool company, especially if you can get better terms elsewhere.

If you decide to take out a personal loan to pay for your swimming pool, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your rates from multiple lenders in two minutes.

Ready to find your swimming pool loan?
Credible makes it easy to find the right personal loan for you.

  • Free to use, no hidden fees
  • One simple form, easy to fill out and your info is protected
  • More options, pick the loan option that best fits your personal needs
  • Here for you. Our team is here to help you reach your financial goals

Find My Rate
Checking rates won’t affect your credit

Keep Reading: Where to Get a Personal Loan

About the author

Eric Rosenberg

Eric Rosenberg

Eric Rosenberg is a Credible expert on personal finance. His work has been featured at Business Insider, Investopedia, The Balance, The Huffington Post, MSN Money, Yahoo Finance, Mint.com and more.

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The case of the ugly-credit customer

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Thea Dudley

Dear Thea,

I recently had a customer apply for credit, and their commercial credit report was UGLY. They owe everyone, and they’re past due 90+ days. They have a few big orders pending with us and I feel they have been shut off everywhere else, which is why they are pushing so hard to get our orders shipped. I called the president of the company and told him we were opening his account COD so the orders pending would need to be paid prior to shipping them out. He blew up. He said he didn’t care about the information on the DNB report and it did not relate to them. Then he screamed at me, asking if we were going to send the materials. I am not interested in acquiring another slow paying account, so I need your thoughts.

Signed, Miffed in Michigan

Dear Miffed,

Control freaks, abusers of credit, and manipulators of people don’t ever question themselves. They never ask themselves if the problem is actually them, and they always say the problem is someone else. Such is the life of the slow-paying/no-paying account.

Yes, Mr. Crappy Credit Report, it is completely everyone else’s fault that your credit payment history looks like a piece of Swiss cheese: full of holes and slightly smelly. In fact, the Secret Society of Credit Managers got together last week and selected your company as THE ONE we were going to target for the month to make your professional life a nightmare. It has nothing to do with your inability to pay your invoices in a timely fashion. You, as always, are an innocent my dear customer.

Let’s be real here: customers with negative or poor credit history ALWAYS know they have bad credit, but they always posture like it is brand new information, heard for the very first time. What? My credit is bad? No, who is reporting me that way? I want names, numbers, I dispute it. This is total BS! The list of objections goes on and on. One thing they do know, it is wrong, and you need to give them credit RIGHT NOW or they will take their business elsewhere (oh, the horror.)

Blowhards and bullies shout over the top of you and push their agenda because that’s what worked for them in the past. Their theory is “if you say it loud enough and angry enough with enough threats and forcefulness, it becomes true and others back down.”

Well, I like to throw caution to the wind and pet that kitty backwards. If you are going to come at me bro, don’t come empty-handed. You’re not the first guy to lose his stuffing at me. So, your credit report is junk. Ok, no problem. I will email you a copy and you can address it directly with the commercial credit bureau I pulled it from. Once you two have kissed and made up, I will pull a new one and if it is good, then welcome to the family!

In absence of that, let’s take a look at the trade references you listed on your credit application. I will personally call each and every one of them. Once I have made contact and have the information back, we can reevaluate. Just so we are on the same page, trade references are who you currently purchase like materials from. I do not want anyone you hire (so no sub-contractors, no contractors, no homeowners), no big box, no gas and sip, no personal testimonials.

How about some financials? I will take those. Show me what you have under the hood. Since this is a family publication, I cannot print what some of the reactions to those requests have been but most of you have pretty good imaginations and can fill in those blanks.

If someone truly believes their credit report is inaccurate, they have a normal conversation about it, in a normal tone. In this case the old adage, “the louder they are, the harder they fall” applies, so take heed.

With more than 30 years of credit management experience in the LBM industry, Thea Dudley consults with companies on a wide range of credit and financial management issues. Contact Thea at theadudley@charter.net.

 

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Credit mistakes to avoid – It’s Your Money

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Small credit mistakes, like paying off your credit card a few days late, aren’t a big deal.

You pay a small penalty or a bit of interest and carry on as before. A slip up like that won’t come back to haunt you the next time you apply for a mortgage.

Other mistakes though can have a significant impact, even if they seem relatively minor at the time. They can stay on your credit record for years and potentially cause you to not qualify for a mortgage or loan or have to pay a higher interest rate.

Here’s a list of five credit mistakes that you definitely want to avoid:

Ignoring your financial details.

Not being aware of what interest rates you are paying or when a temporary or “teaser” rate ends can be very costly. Carrying debt on certain accounts harms your credit score far more (credit cards) than others (lines of credit).

You need to have a clear picture of all debts that you owe, how much they are costing you and review regularly to make improvements if necessary. 

Draining retirement funds to avoid bankruptcy.

While nobody wants to claim bankruptcy, sometimes it’s the right choice. RRSPs are generally exempt from bankruptcy proceedings (except for amounts deposited in the last 12 months in some provinces) and can be left there to help you rebuild on the other side of the bankruptcy proceedings.  

Not checking your credit.

You can check your credit report easily and for free in Canada through Equifax and TransUnion. Checking regularly (at least once per year if not twice) will allow you to become aware of any credit issues or fraud sooner so that they can be dealt with.

Having something unexpected appear on a credit report is common for Canadians and it’s up to you to watch for them.

Co-Signing a loan.

While this might make sense on a rare occasion, it should be avoided most of the time and only be considered with extreme caution.

I realize that it can be hard for young people to buy their first home these days but if they can’t qualify on their own, they likely shouldn’t be going ahead. Not only will your co-signing reduce your own borrowing capacity, if the loan isn’t repaid it can be disastrous to your own finances.  

Not carrying any credit at all.

With all the pitfalls of having access to credit, it is still a necessary evil for most people. If you elect to go without a credit card or any other credit vehicle, you won’t build up a credit score which means you won’t be able to qualify for a loan when you need one.

And don’t cancel your first credit card either. Longevity in your credit history is equally important! 

Having bad credit isn’t permanent and your score can be improved over time. But like many things in life, doing so takes a little bit of time and effort. But it’s not that hard.

Just put a semi-annual reminder in your calendar to sit down and review your credit and request a report.

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