Press release
Connecticut BBB applauds new formula in place for calculating consumer credit scores
New FICO formula more forgiving for consumers seeking creditWallingford, CT - March 20, 2009 – There is new help for consumers who are looking to re-finance their homes or secure other loans from financial institutions.
The Fair Isaac Corporation, creator of the FICO score has changed its model for determining credit ratings in what is called “FICO 08.”
The scores, range from 300 to 850 and indicate consumers’ risk as borrowers, for defaulting on loans. The higher the score, the better. The national average FICO score is around 650.
More than 90 percent of the largest banks in the country rely on these ratings to determine both who they will lend to and at what interest rate.
Connecticut Better Business Bureau president, Paulette Scarpetti, says the changes more accurately reflect a borrower’s risk of defaulting on a loan.
“As a result of the change to the FICO formula, the Fair Isaac Corporation predicts most consumers may see their credit scores increase, rather than decrease. This is of crucial importance given the current economic difficulties, as many American families struggle to stay afloat by trying to secure more credit.”
The fair Isaac Corp. explains that two people with the same credit score under the old formula may have completely different scores under FICO 08.
FICO 08 is more forgiving of minor slip-ups and designed to more accurately reflect a borrower’s risk. Fair Isaac also predicts the new system will help lenders reduce default rates on consumer credit in the order of five to 15 percent.
In calculating scores, FICO 08 will continue to take into account factors such as a consumer’s financial history, including debt load, length of credit history, the number of open lines of credit and how much of that credit is being used. The difference is the weight each of these factors will be given in determining the FICO score.
Your Better Business Bureau has advice on how you can maintain a healthy credit score, and how the new system can work in your favor:
Small slip-ups hurt less:
Debts of less than $100 will have less of a negative impact on your score.
Looking at the big picture:
FICO 08 will take a more comprehensive look at your credit history, so that one negative aspect in your credit history will not necessarily destroy your credit rating.
Less available credit and closing accounts will hurt more:
Until the changeover to FICO 08, a history of using most of available credit had a negative effect on a credit score. That impact will now be even greater. As well, too few open credit accounts, inactive accounts or closing accounts will have a more significant negative impact.
Varied lines of credit will help:
This means a credit score may be improved by having different lines of credit, such as a mortgage, car loan or school loans in addition to credit cards.
Consumers are entitled to a free report once every 12 months at AnnualCreditReport.com. This will provide a report from each of the three major credit reporting agencies, Equifax, Experian and TransUnion. These give the consumer information on how many accounts are open, their credit balance and contact information to close old accounts. For a few dollars, credit reporting agencies will also provide the FICO score.
Paying to find out that all-important number is a good investment for consumers who are concerned about their credit score, and the cost is minimal compared to the cost of being rejected for a loan, paying higher interest rates or even being turned down for a new job.
More information on being a responsible borrower and advice on how to increase your FICO score are available at bbb.org.
Founded in 1928, Connecticut BBB is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. BBB offers objective advice and a wide range of education on topics affecting marketplace trust. BBB also offers complaint and dispute resolution support for consumers and businesses. Today, 128 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than three million local and national businesses and charities. For more advice on finding companies and businesses, start your search with trust at www.bbb.org.
Connecticut Better Business Bureau
94 South Turnpike Rd
Wallingford, CT 06494
This release was published on openPR.
Permanent link to this press release:
Copy
Please set a link in the press area of your homepage to this press release on openPR. openPR disclaims liability for any content contained in this release.
You can edit or delete your press release Connecticut BBB applauds new formula in place for calculating consumer credit scores here
News-ID: 72796 • Views: …
More Releases from Connecticut Better Business Bureau

Connecticut Better Business Bureau offers tips on buying a used car
Getting a good deal depends on many factors
Wallingford, CT - June 9, 2009 – As economics drive some consumers to buy used vehicles, buyers should invest time to consider the same issues that apply to buying a new car.
While some consumers are “going green” by seeking out more environmentally-friendly vehicles, many others are opting for used cars to replace their older vehicles or gas-guzzlers.
According to Connecticut Better Business Bureau President,…

Connecticut Better Business Bureau issues warning about census-related fraud
Scams involve attempts at identity theft
Wallingford, CT - May 19, 2009 – As the 2010 Census gets under way, Connecticut Better Business Bureau cautions consumers to be cooperative but careful about providing personal information to would-be census workers who make contact by phone or show up at their front door.
More than 140,000 U.S. Census workers are fanning out across the nation to verify the addresses of households and count…

Connecticut Better Business Bureau urges parents to visit summer camps before se …
Brochures alone may not give an accurate picture of facilities
Wallingford, CT - May 11, 2009 – Connecticut Better Business Bureau is urging parents who are sending their kids to camp for the summer to do their homework before signing a contract.
Connecticut Better Business Bureau President, Paulette Scarpetti, says more than the cost, advertising claims, safety and medical issues are of critical importance.
“Brochures are designed to sell a summer camp and…

Connecticut BBB warns against a summer scam going door-to-door nationwide
Trying to help a good cause could get you ripped off by fraudulent magazine salespeople
Wallingford, CT - May 8, 2009 – Better Business Bureau warns that deceptive door-to-door magazine sales crews are hitting the pavement in Connecticut, and looking to earn a quick buck this summer. In the last 12 months alone, BBB’s across the nation received 1,100 complaints from consumers in 46 states against more than 50 companies that…
More Releases for FICO
AML Software Market Is Booming Worldwide | Major Giants FICO, NICE Actimize
According to HTF Market Intelligence, the Global AML Software market is projected to grow from 2.5Billion USD in 2023 to Global AML Software Market Size, Player Analysis & Segment Growth 2020-2032 USD by 2032, at a CAGR of 13%.
An extensive elaboration of the AML Software Market by HTF MI Research evaluates marketplace size, trend and forecast to 2032. AML Software market study covers significant research data and proofs to…
Advanced Analytics Market Growth Potential is Booming Now: ANGOSS, FICO, IBM
The Latest published market study on Global Advanced Analytics Market provides an overview of the current market dynamics in the Advanced Analytics space, as well as what our survey respondents- all outsourcing decision-makers- predict the market will look like in 2029. The study breaks the market by revenue and volume (wherever applicable) and price history to estimate the size and trend analysis and identify gaps and opportunities. Some of the…
Autonomous Agents Market Is Booming Worldwide | FICO, Nuance Communications, Inf …
Advance Market Analytics published a new research publication on "Autonomous Agents Market Insights, to 2028" with 232 pages and enriched with self-explained Tables and charts in presentable format. In the Study you will find new evolving Trends, Drivers, Restraints, Opportunities generated by targeting market associated stakeholders. The growth of the Autonomous Agents market was mainly driven by the increasing R&D spending across the world. Some of the key players profiled…
Advanced Analytics Market Is Booming So Rapidly | IBM, Microsoft, Fico
The Advanced Analytics Market study with 65+ market data Tables, Pie charts & Figures is now released by HTF MI. The research assessment of the Market is designed to analyze futuristic trends, growth factors, industry opinions, and industry-validated market facts to forecast till 2029. The market Study is segmented by key a region that is accelerating the marketization. This section also provides the scope of different segments and applications that…
Management Decision Market to See Competition Rise | IBM, FICO, SAS
The Latest Released Management Decision market study has evaluated the future growth potential of Management Decision market and provides information and useful stats on market structure and size. The report is intended to provide market intelligence and strategic insights to help decision-makers take sound investment decisions and identify potential gaps and growth opportunities. Additionally, the report also identifies and analyses changing dynamics, and emerging trends along with essential drivers, challenges,…
Advanced Analytics Market Future Growth Outlook | IBM, Angoss Software, FICO
Latest published market study on Global Advanced Analytics Market with + data Tables, Pie Chart, high level qualitative chapters & Graphs is available now to provide complete assessment of the Market highlighting evolving trends, Measures taken up by players, current-to-future scenario analysis and growth factors validated with View points extracted via Industry experts and Consultants. The study breaks market by revenue and volume (wherever applicable) and price history to estimates…