Finance & Loans

New ways to calculate your FICO score

Banks are tiptoeing back to issuing credit reports a recent issue of the Bloomberg Businessweek magazine.  During last few years when the U.S. and the world was and still going through a financial crisis, banks and credit card issuers not only took a back seat but also stopped new credit issues as well as reduced credit limits.  There are some signs of issuing new credit cards but may be with new tools.

Among the new tools, they are looking into bank account activity; payment history of rent, telephone bills, insurance payments, utility bill payments; and payment behaviors such as whether a customer pay his or her car loan before the mortgage.  Imagine using rent payment data to calculate the score?  Not only that, credit agencies can provide trend data on your score whether it is going up or down over the years.

The Fair Isaac (FICO) introduced a new system for credit scores incorporating information gathered from publicly available sources and traditional credit reports.  The result is more Americans almost 44 percent of the borrowers now fall into a sterling credit category of 800 to 850 levels.  You need to be vigilant and take immediate measures to correct any errors in your credit history.