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How the New FICO® Score 10 Suite Will Affect Your Score

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The Fair Isaac Corporation (FICO®) recently announced that they will release the new FICO® Score 10 Suite in summer 2020. This scoring model update will include FICO® Score 10 and FICO® Score 10 T.

FICO® says the new suite will have stronger predictive power and use more comprehensive data than previous scoring models. This helps lenders make more precise lending decisions.

For example, FICO® says that lenders can reduce the defaults in their portfolio by 10 percent among newly originated bank cards and 9 percent among newly originated auto loans, compared to using FICO® Score 9.

For consumers, the new scoring model could impact scores and future credit and loan applications depending on both their current scores and credit history. Read through our guide below to learn about the changes with FICO® Score 10 and how they could potentially affect you.

Table of Contents

What are the New FICO® Scores?

FICO® Score 10 and FICO® Score 10 T are two scores included in the new score suite. We’ll briefly explain the differences between both before diving into the major changes the new suite brings.

FICO® Score 10

Specifically, for FICO® Score 10, many things have stayed similar to make it easy for lenders to transition from old models. This means the scoring model uses the same reason codes and consistent scoring ranges from previous models.

FICO® Score 10 does not use trended data like past models to give lenders the flexibility of using the model they prefer to use. 

FICO® Score 10 T

FICO® Score 10 T, on the other hand, uses trended data (also known as time-series data). Trended data will give lenders a historical view of a person’s credit history from the previous 24 months.

This is the first time FICO® will use trended data in their scoring model. Previous models only gave lenders a small window into a person’s credit history, but trended data allows lenders to see behaviors and patterns based on a longer snapshot of a user’s credit history. For example, lenders can see if you tend to run up high balances on your credit card during the month, even if you’re never late on payments.

fico score 10 and fico score 10 T

What Are the Main Changes?

The main changes with the FICO® Score 10 Suite are that FICO® Score 10 T uses trended data, personal loans are treated differently than before, and high balances, revolving debt and late payments are more heavily scrutinized.

Additionally, data for the entire suite is more comprehensive than before and algorithms have been updated to better predict risk for today’s consumer.

Trended Data

The use of trended data is the main source of the other major changes. Since lenders can take a historical look into a borrower’s behavior, they can make more informed decisions.

Personal Loans

Using personal loans can drop your score if FICO® determines you’re irresponsibly using it.

Vice President of Scores and Analytics at FICO®, Joanne Gaskin, said in an NPR interview that personal loans are now broken out into their own category to evaluate whether or not they are properly used.

In the old model, your score may have gone up if you paid off a large sum of debt with a personal loan. The new model will look at your behavior over a longer period of time to see if you continued to keep your balances low or if you increase your revolving debt after paying off the loan. For borrowers who do the latter, they can see a potential drop in their credit score.

fico will scrutinize a person' credit more heavily after they use a personal loan

High Balances, Revolving Debt and Late Payments

A high balance and revolving debt will more severely impact credit scores with this model compared to previous ones since FICO® Score 10 T can track your debt over time. Both high balances and revolving debt impact your credit utilization.

Late payments, also referred to as delinquency, will also more severely impact a person’s credit score. Payment history is the factor that most highly impacts your credit scores.

“Those consumers with recent delinquency or high utilization are likely going to see a downward shift, and depending on the severity and recency of the delinquency it could be significant,” FICO® Vice President of Product Management, Dave Shellenberger, said in a statement.

Why Does FICO® Update Their Scoring Model?

FICO® updates their scoring model to reflect consumer trends and lender needs. They update their scoring model about every four to five years, but this fluctuates depending on need and the types of changes needed.

These updates help lenders make more accurate decisions when evaluating credit applications. Changes can sometimes work in favor for consumers if they are more accurately scored as a result.

updated scoring models accurately reflect consumer trends and lender needs when evaluating credit applications

For example, FICO® predicts that the new FICO® Score 10 T will allow credit card lenders to approve up to 6 percent more applicants while keeping default rates steady, compared to FICO® Score 8.

When Will Lenders Adopt the FICO® Score 10 Suite?

FICO® will release the FICO® Score 10 Suite this summer, but it may take some time before lenders adopt the new model. FICO® says most lenders still use FICO® Score 8, which was introduced in 2009.

Although FICO® is used by most lenders, some use other scoring models like VantageScore. This is a newer scoring model created by the big three credit bureaus: Experian®, TransUnion® and Equifax®. Despite this, lenders may be tempted to use the newest FICO® score because of its stronger predictive model.

“When we release a stronger more predictive model we see that lenders will migrate to the stronger model because it allows them to make more loans to more consumers without taking more default risk,” Shellenberger said to MarketWatch.

How Could the Changes Affect Me?

Borrowers will see their credit score improve if they currently have a good credit score, but will see a decline if they’re in a lower FICO® score range, about 580 and below, Gaskin said in that same NPR interview.

borrowers with a current fico score at or below 580 could see a decline with the fico score 10 scoring model

About 110 million consumers will see a change of less than 20 points to their score under the new credit score model and roughly 80 million consumers will see a change in score of 20 or more points in either direction, upward or downward, FICO® said as reported by CNBC.

What Should I Do if I Think My Score Will Be Negatively Affected?

You can pay down and keep balances low, start an emergency fund, and avoid accumulating debt after using a personal loan if you think the new scoring model is going to hit your score. Take a look at below at how you can do these things to prepare.

  • Pay down any high balances: Chip away at high balances since it has a more pronounced impact with the new scoring model.
  • Pay balances more frequently to keep them low: Trended data can work against you if your balance is consistently high throughout the month. You can make smaller payments more frequently and decrease your spending to keep utilization low.
  • Start and maintain an emergency fund: Instead of turning to credit cards or loans to cover an unexpected expense, an emergency fund is a great resource in a pinch that won’t impact your credit score. Start by putting aside what you can afford each month.
  • Avoid building high balances after paying off debt with a personal loan: Since personal loans are given extra attention with this new model, be careful not to generate more debt after paying it off with a loan. Explore other options before taking out a personal loan and create a budget you can stick to in order to avoid taking on more debt.
how to protect score drops from the fico score 10

How Can I Maintain a Good Credit Score During Scoring Model Changes?

Although it’s great to stay on top of scoring model changes, it’s best to continue engaging in good credit habits to maintain a good score. Keeping your balances down and paying bills on time are things you should always do since the factors that affect your credit score likely won’t change.

You can look into options like secured credit cards and credit builder loans if you have bad or nonexistent credit. These are options you can use to build or rebuild your credit if you have difficulty applying for unsecured credit cards or other types of loans.

Take a look at our tips for building credit if you want to take a deeper dive into improving your credit score and establishing good habits to keep your credit and finances in good shape.

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Should you pay down debt or save for retirement?

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While establishing a comprehensive, workable budget is undeniably one of the most important factors in maintaining a healthy financial life, it can also be one of the most difficult. For those who are struggling with personal debt, building a budget can be particularly challenging. When the money coming in has to stretch like a contortionist to cover expenses, it can be hard to determine where to focus — and where to trim.

Sometimes, the battle of the budget can come down to a choice between dealing with the present — and thinking about the future. When your income is running out of stretch, do you pay off your existing debt, or do you start saving for retirement? At the end of the day, the solution to that particular dilemma depends on the type of debt you have and how far you are from retiring.

If you have high-interest debt, pay it down

When considering how to allocate your budget, it’s important to understand the different kinds of debt you may have. Consumer debt can be categorized into two basic types: low-interest debt and high-interest debt, each with its own impact on your credit (and your budget).

In general, low-interest debt consists of long-term or secured loans that carry a single-digit interest rate, such as a mortgage or auto loan. Though no debt is the only real form of good debt, low-interest debt can be useful to carry. For instance, purchasing a home with a low-interest mortgage can actually save you money on housing costs if you do your homework and buy a house well within your price range.

High-interest debt, on the other hand, typically has a hefty double-digit interest rate and shorter loan terms, such as that of a credit card or payday loan. High-interest debt is the most expensive kind of debt to carry from month to month and should always be priority number one when building a budget.

To illustrate why you should focus on high-interest debt above everything else, consider a credit card carrying the average 19% APR and a $10,000 balance. If the balance goes unpaid, that high-interest credit card debt will cost $1,900 a year in interest payments alone. Now, compare that to the stock market’s average annual return of 7%, and it becomes clear that you’ll see significantly more bang for your buck by putting any extra funds into your high-interest debt instead of an investment account.

If you are having trouble paying off your high-interest debt, there may be some steps you can take to make it more manageable. For example, transferring your credit card balances from high-interest cards to ones offering an introductory 0% APR can eliminate interest payments for 12 months or more. While many of the best balance transfer cards won’t charge you an annual fee, they may charge a balance transfer fee, so do your research. You’ll also want to make sure you have a plan to pay off the new card before your introductory period ends.

Most balance transfer offers will require you to have at least fair credit, so if your credit score needs some work, you may not qualify. In this case, refinancing your high-interest debt with a personal loan that has a lower interest rate may be your best bet. Make sure to compare all of the top bad credit loans to find the best interest rate and loan terms.

If you’re nearing retirement, start to save

The closer you get to retirement age, the more important it becomes to ensure you have adequate retirement savings — and the more pressure you may feel to invest every spare penny into your retirement fund. No matter your age, however, paying off your high-interest debt should always remain the priority, as it will always provide the best rate of return (as well as likely provide a credit score boost).

Indeed, no matter how tempting it becomes, you should avoid reallocating money you’ve dedicated to paying off high-interest debt to save for retirement. Instead, the focus should be on re-evaluating your budget to find any additional savings you can. To be successful, you will need to make a strong distinction between want and need — and, perhaps, make some tough lifestyle choices.

Though simply eliminating your daily coffee drink won’t magically provide a solid retirement fund, saving a few bucks by homebrewing while also eliminating a pricey cable bill in favor of an inexpensive streaming service — or, better yet, free library rentals — can add up to big savings over the course of the year. The ideal strategy will involve overhauling every aspect of your lifestyle, combining both large and small cuts to develop a lean budget structured around your long-term goals.

Of course, while you should never allocate debt money to your retirement savings, the reverse is also true. It is almost always a horrible idea to remove money from your retirement account before you hit retirement age — for any reason. Withdrawing early means you will be stuck paying hefty fees for withdrawing money early and, depending on the type of account, you may also have to pay significant taxes.

Aim for both goals by improving income

As you take the necessary steps to pay off debt and save for retirement, you may have already stretched the budget so thin it’s practically transparent. In this case, it is time to consider ways to improve your overall income. Increasing the amount you have coming in not only provides extra savings to put toward your retirement, but may also speed up your journey to becoming debt-free.

The easiest solution may be to look for ways to increase your income through your current job; think about taking on additional shifts or overtime hours to earn some extra cash. Depending on your position — and the time you’ve been with the company — consider asking for a pay raise or promotion, as well.

If you do not have options to make more money at your day job, it may be time to find a second job. Look for opportunities that provide flexible schedules that will accommodate your regular job; many work-from-home positions, for example, can easily fit into most work schedules. Doing neighborhood odd jobs, such as babysitting and dog walking, may also provide a solid income boost without interfering with your existing job.

For some, the need to pay off debt and improve retirement savings can be more than just a source of stress — but a hidden opportunity to begin a new career adventure. Instead of being weighed down by yet more work, use the desire to better your budget as a reason to explore the profit potential of a passion or hobby. Starting a small online store, part-time consulting service, or other small business can be a great way to improve your income and your overall happiness.

While it may sound intimidating, starting a side business can be as simple as putting together a professional looking website and doing a little marketing legwork to spread the word. And no, building a website isn’t as scary — or expensive — as it seems, either. A number of the top website builders now offer simple drag-and-drop interfaces perfect for putting together a professional-looking web page in minutes (without breaking the bank).

Learn how you can start repairing your credit here, and carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.



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How does a loan default affect my credit?

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loan default

Nobody takes out a loan expecting to default on it. Despite their best intentions, people sometimes find themselves struggling to pay off their loans. These types of struggles happen for many reasons, including job loss, significant debt, or a medical or personal crisis.

Making late payments or having a loan fall into default can add pressure to other personal struggles. Before finding yourself in a desperate situation, understanding how a loan default can impact your credit is necessary to avoid negative consequences.

30 days late

Missing one payment can further lower your credit score. If you can pay the past due amount plus applicable late fees, you may be able to mitigate the damage to your credit, if you make all other payments as expected.

The trouble starts when you (1) miss a payment, (2) do not pay it at all, and (3) continue to miss subsequent payments. If those actions happen, the loan falls into default.

More than 30 days late

Payments that are more than 30 days past due can trigger increasingly serious consequences:

  • The loan default may appear on your credit reports. It will likely lower your credit score, which most creditors and lenders use to review credit applications.
  • You may receive phone calls and letters from creditors demanding payment.
  • If you still do not pay, the account could be sent to collections. The debt collector seeks payment from you, sometimes using aggressive measures.

Then, the collection account can remain on your credit report for up to seven years. This action can damage your creditworthiness for future loan or credit card applications. Also, it may be a deciding factor when obtaining basic necessities, such as utilities or a mobile phone.

Other ways a default can hurt you

Hurting your credit score is reason enough to avoid a loan default. Some of the other actions creditors can take to collect payment or claim collateral are also quite serious:

  • If you default on a car loan, the creditor can repossess your car.
  • If you default on a mortgage, you could be forced to foreclose on your home.
  • In some cases, you could be sued for payment and have a court judgment entered against you.
  • You could face bankruptcy.

Any of these additional consequences can plague your credit score for years and hinder your efforts to secure your financial future.

How to avoid a loan default

Your options to avoid a loan default depend upon the type of loan you have and the nature of your personal circumstances. For example:

  • For student loans, research deferment or forbearance options. Both options permit you to temporarily stop making payments or pay a lesser amount per month.
  • For a mortgage, ask the lender if a loan modification is available. Changing the loan from an adjustable rate to a fixed rate, or extend the life of the loan so your monthly payments are smaller.

Generally, you can avoid a loan default by exercising common sense: buy only what you need and can afford, keep a steady job that earns enough income to cover your expenses, and keep the rest of your debts low.

Clean up your credit

The hard reality is that defaulting on a loan is unpleasant. It can negatively affect your credit profile for years. Through patience and perseverance, you can repair the damage to your credit and improve your standing over time.

Consulting with a credit repair law firm can help you address these issues and get your credit back on track. At Lexington Law, we offer a free credit report summary and consultation. Call us today at 1-855-255-0139.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.



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How to identify credit repair scams

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

If you have poor or damaged credit and want to repair it, you may have considered using a credit repair service to help. Unfortunately, there are many companies and individuals that want to take advantage of unsuspecting consumers needing help with their credit. 

While there are legitimate companies that can help you repair your credit, there are also credit repair scams that are only after your money and your information for identity theft purposes. To keep both safe, we created this guide to help you tell the difference between legitimate credit repair companies and credit repair scams.

Five signs of a credit repair scam

There are many things credit repair companies are not allowed to do or promise customers. If it sounds like it’s too good to be true, it probably is, and you should steer clear of that company. We’ve put together a list of signs you should watch out for when working with credit repair companies.

1. Guaranteed results

Under the Credit Repair Organizations Act (CROA), credit repair companies cannot guarantee results. Here are a few common examples of false promises unethical credit repair companies might make:

  • Improvement to your credit score
  • Results in a fixed time period
  • Removal of all of negative items, even if they are accurate

2. Up-front payment is requested

The CROA prohibits credit repair companies from asking for any payment before they render services. Many scammers know that most consumers don’t know this and, as a result, promise a quick turnaround on credit repair for a large upfront payment.

Some illegitimate credit repair companies may not allow you to cancel unless you pay a fee. All credit repair companies are required by law to give you at least three days to cancel services with them and there is no penalty for canceling.

3. Claims a new identity is needed 

A credit repair company can’t promise or offer you a new identity. Anyone offering you a new identity is a fraud. Besides guaranteeing results, scammers may try to promise you a clean slate with a new Employer Identification Number (EIN) or a Credit Privacy Number (CPN).

They tell you to use these numbers on your future credit applications instead of your Social Security Number. We explain more about common credit repair scams below.

4. Don’t explain your legal rights

Credit repair companies should explain your legal rights to you from the beginning. These are a few common things an unethical credit repair company might do.

  • Tells you not to contact the credit bureaus directly
  • Doesn’t give you a copy of the contract to review before signing
  • Fails to inform you that you can repair your credit yourself without the help of a credit repair company
  • Leaves out important information from the contract, like the date services will be executed or the amount you will pay

If you feel like the company isn’t telling you everything or refusing to answer your questions, you should seek services elsewhere.

5. Asks you to misrepresent information

Finally, an unlawful credit repair company might ask you to misrepresent your information. This can range from unlawfully using an EIN or CPN number in place of your social security number to claim you are a victim of identity theft when you’re not.

five signs of a credit repair scam

Common credit repair scams 

You’ll most likely see credit repair companies illegally promising results. However, it’s important to familiarize yourself with other scams so you understand what is and is not legal. We highlighted a few common ones below.

File segregation schemes 

A file segregation scheme is when a company or individual offers to give you an Employee Identification Number (EIN) to use in place of your Social Security Number when you apply for credit. It’s illegal for companies to do this, and it’s illegal for consumers to obtain one to use in place of their Social Security Number. 

Credit privacy numbers 

Like an EIN, a Credit Privacy Number (CPN) is created by scammers to use in place of your Social Security Number when applying for credit. Simply put, a CPN is a fake Social Security Number. Usually, these are created using somebody else’s identity, and using one can be considered identity theft. 

Tradeline renting 

Tradeline renting is when you pay for authorized user status so that the tradeline shows up on your credit reports to improve your score. This doesn’t repair any negative information on your credit, but adding a positive tradeline to your credit report can boost your score.

While this isn’t necessarily illegal, it can get you into trouble. There is nothing wrong with a loved one adding you as an authorized user. However, if you pay to “rent” a tradeline from a stranger, you don’t know how it will impact your credit and it may be a scam to get your money. 

credit repair scams to watch out for

What to do if you are scammed

There are a few things you can do if you realize you’ve fallen victim to a credit repair scam. Take a look at your options below.

who to report a credit repair scam to

Can credit repair companies fix your credit?

Yes, a legitimate credit repair company can help you work to remove inaccurate negative items from your record that may be damaging your credit score. Here are ways to recognize a legitimate, expert credit repair company. Although you can work to repair your credit yourself without a credit repair company, ideally a credit repair company would make the process much easier. Here are some signs of a legitimate, expert credit repair company:

  1. They create a repair strategy custom to your unique situation. A good credit repair company will customize their course of action only after evaluating your credit reports and credit history. Everyone’s credit history is different, and their approach to repairing your credit should reflect that. 
  2. Maintain communication with you during the process. A credit repair company that maintains scheduled calls, emails or any other form of communication with you will help you stay up-to-date with their progress. They shouldn’t keep you in the dark as they’re conducting their services. 
  3. Informs you of your rights from the beginning. At the time of signing, a credit repair company should provide two documents: a disclosure of your right to repair your credit yourself and a detailed contract of services.
  4. Make realistic claims about their services. Like we said above, credit repair companies cannot guarantee results. A legitimate credit repair company will not guarantee timeframes or point changes, but they can guarantee the delivery of services—access to credit monitoring tools, or letters delivered on your behalf. 

How to safely repair your credit

Making payments on time and disputing inaccurate information on your credit reports can help you repair your credit. While you can do this on your own, a professional credit repair firm like Lexington Law Firm will make the process easier and more efficient.

Lexington Law Firm proudly adheres to CROA to make sure we give our clients the best experience possible. For over a decade, we’ve helped clients challenge information that is unfair, inaccurate and unsubstantiated. Give us a call today for a free, personalized credit report consultation.


Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.

Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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