Leave it to FICO to introduce a new scoring model right as people were getting used to the older one. For the very first time in history, FICO has introduced TWO new scoring models: FICO 10 and FICO 10 T.

The “T” in FICO 10 T stands for “trended data.”

With the incorporation of new algorithms and data, FICO 10 credit scores are several levels above the scoring models used before. However, there are many financial experts that say consumers will not see massive variations in their current credit scores.

What Is Trended Data?

Data is the greatest currency in modern society despite any new privacy laws that control how organizations collect and store data. FICO 10 T tracks your credit habits from the past 24 months to provide data. The data considers any changes that occurred in your credit portfolio during the past 24 months as well.

Yes, this might sound a bit scary, but it is worth keeping in mind that this is much better than what we got with FICO in the past. For instance, Vantage Score 4.0 has used this type of data to calculate credit scores, and they have been using it since 2017. Now, both of these will use past data to indicate any financial risks you may take in the future.

Changes To Note

Now is one of the best times to speak to a financial advisor if you have access to one. You may also speak with your bank to get advice on how to change your consumer habits to reflect this new credit scoring model.

Here are a few factors that you will want to keep in mind as these scoring models take root:

• Personal Loans

One of the biggest concerns for lenders is high credit card debt. FICO 10 now raises red flags for personal loans too. One of the largest growing debt segments is personal loans. People often use them to finance vacations, purchase homes, or consolidate credit cards.

• Missed Payments

FICO 10 is set to place more weight on missed payments, even though there have always been red flags for missed payments in the past. Those with perfect credit histories may see some negative changes in their credit scores if they miss payments.

• Credit Card Debt

Make sure to focus on paying your credit card debt off every month. Paying off your credit card in full helps to keep your credit utilization low. Credit utilization could play a fairly significant role. When you consistently pay your bills early, you don’t face higher penalizations for missing payments.

It is important to start preparing for the new FICO 10 scoring model now. If you have a high credit utilization ratio and you are looking to increase the credit available to you, make sure to get in contact with us and ask us how tradelines might be able to help you. We look forward to helping you reach your financial goals.