What is FICO 8 and Who Uses It?
FICO 8 is the most normally exploited version of the FICO exemplar. Like previous versions, it takes on-time payments, account balances, and other credit history into account when calculating your score. however, the FICO 8 model has a few features that you should be mindful of before applying for credit .
|FICO 9||Newest version. Not widely used.|
|FICO 8||Most common. Used for Auto and Bankcard lending.|
|FICO 5||Used by mortgage lenders. Built on data from Equifax.|
|FICO 4||Used by mortgage lenders. Built on data from TransUnion.|
|FICO 2||Used by mortgage lenders. Built on data from Experian.|
One of the most authoritative aspects about FICO 8 is that it ’ mho more sensitive to high utilization of credit lines when compared to previous versions of FICO. We recommend that you stay under 30 % credit utilization to keep your FICO 8 score from dropping due to high use .
On the other hand, FICO 8 has positive changes for consumers deoxyadenosine monophosphate good. Accounts in collections with balances under $ 100 are now ignored by your FICO score. previously, all collections accounts were factored into your FICO score, no topic how small they were. additionally, FICO 8 is more absolvitory to one-off late payments of 30 days or more when compared to previous versions of the FICO exemplary angstrom long as all other accounts are in good stand .
There are two sub-versions of the FICO 8 score : FICO 8 Auto and FICO 8 Bankcard. As you ’ d expect, lenders use FICO 8 Auto to assess creditworthiness for car loans and FICO 8 Bankcard to assess creditworthiness for new citation card accounts .
These specialized versions of the FICO 8 scoring model are similar to standard FICO 8, but with emphasis on a different part of your credit history. For model, FICO 8 Bankcard places a bigger stress on your behavior with credit cards than FICO 8 Auto. Despite these differences, your FICO 8 Auto and Bankcard scores will be largely exchangeable to your standard FICO 8 score.
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FICO 8 vs FICO 9: What Are the Differences?
FICO 9 is exchangeable to FICO 8 but differs when it comes to collections and rent payments. FICO 9 counts medical collections less gratingly than other accounts in collections, so a surgery bill in collections will have less of an impact on your credit score than a credit card bill in collections .
additionally, FICO 9 ignores accounts in collections that have a zero dollar libra. If you had a recognition poster account go to collections but subsequently paid it off, FICO 9 will nobelium longer practice said collections account against your seduce. This is different than FICO 8, which factors all collections amounts of $ 100 or more into your FICO score—even if they ’ re completely paid off .
precisely because collections with a zero balance wheel are ignored by FICO 9 does not mean that lenders will ignore them. Credit chest of drawers will still show these collections on your entire credit report, and lenders will see them when they reviews your broad recognition history .
last, FICO 9 factors rental history into your accredit score. This makes it easier for people with no credit to build a senior high school credit score with their monthly on-time rent payments. unfortunately, this is dependent on your landlord actually reporting rent payments to credit bureaus—something not yet seen on a big scale .
Most lenders have yet to adopt FICO 9 since it ’ s still new to the grocery store. This will change as time goes on, so get down monitoring your FICO 9 score now to ensure you do n’t encounter any surprises as the years go on. You can pay to view your official FICO 9 score on FICO ’ s official credit monitor service. unfortunately, there is no one offering a free FICO 9 seduce at this time .
What Are Older FICO Models?
FICO 8 and 9 aren ’ t the only versions in use. Some lenders and industries use older versions like FICO 2, 4, and 5. In fact, these are still used by the mortgage diligence when assessing creditworthiness for new mortgages and deciding on interest rates .
FICO 2, 4, and 5 are very like. The chief differences between the three is that 2, 4, and 5 function data from Experian, TransUnion, and Equifax respectively. mortgage lenders pull one of each and compile the reports in a document called a Residential Mortgage Credit Report. Duplicate datum is screened and removed, and the middle seduce of the three is picked to represent your worthiness to pay back the mortgage.
FICO 8 and 9 use data from a unmarried credit chest of drawers, so using FICO 2, 4, and 5 in concert gives mortgage lenders a more complete position of your creditworthiness because they can see the history of every history you ’ ve opened. This is specially helpful for mortgage lenders as many creditors do n’t report account history to all three credit chest of drawers .
How Does FICO Differ from Other Credit Score Models?
VantageScore is another popular credit scoring exemplar. Like FICO, VantageScore 3.0 grades credit on a 300 to 850 orient scale and takes credit utilization, credit inquiries, and on-time payments into report. however, the two models differ in a few ways, with one major difference. FICO penalizes all late payments the lapp way, while VantageScore penalizes recently mortgage payments higher than other late payments .
FICO and VantageScore besides differ in how they handle combining similar credit inquiries. With FICO, you have a 45 day grace period where similar credit inquiries for car loans, mortgages, and student loans are combined into one inquiry. VantageScore gives you a smaller 14 day deck period, which can make comparison shopping for loans harder .