Is Your FICO Credit Score About to Fall?

Unhappy woman with credit card
Photo by Krakenimages.com / Shutterstock.com

If you struggle to stay out of debt or make questionable decisions regarding loans, your credit score might be about to drop.

Changes in how the most commonly used credit score — the FICO score — is calculated mean three types of spending patterns soon could hurt your credit profile, The Wall Street Journal reports. They are:

  • Racking up rising levels of debt
  • Falling behind on loan payments
  • Signing up for personal loans — at least for some consumers

FICO (Fair Isaac Corp.), the company that created the FICO score system that lenders use to gauge creditworthiness, says the shift in how borrowers are evaluated will impact all types of borrowers.

According to the WSJ:

“The changes will create a bigger gap between consumers deemed to be good and bad credit risks, the company says. Consumers with already-high FICO scores of about 680 or higher who continue to manage loans well will likely get a higher score than under previous FICO versions. Those with already-low scores below 600 who continue to miss payments or accumulate other black marks will experience bigger score declines than under previous models.”

The WSJ notes that the changes appear to be an about-face from policies in recent years on the part of FICO and credit-reporting companies that had made it easier for borrowers to lift their scores.

In addition to previously removing some negative material, such as civil judgments, from credit reports, FICO and other credit-scoring and credit-reporting entities had begun to include new data, such as bank account and utility payment histories, in an effort to make it easier for consumers to build a positive credit history.

The WSJ reports that this shift toward scoring borrowers more rigorously may be a result of lenders worrying that many debt-ridden U.S. consumers pose a bigger risk to lenders than the consumers’ current credit scores suggest.

Lenders may also have concerns about the future of the U.S. economy, which has been expanding for a decade and may be running out of steam, the WSJ reports.

Hoping to raise your own credit score quickly? Money Talks News founder Stacy Johnson has some thoughts about how to do so. Tap his wisdom by reading “What’s the Fastest Way to Increase My Credit Score?

Do these changes to how credit scores are calculated worry you? Sound off in comments below or on our Facebook page.

How to earn $30 in less than 30 seconds

Earn extra money by using Rakuten (formerly known as Ebates) — a site that gets you cash back at more than 2,500 stores. As a bonus for joining Rakuten between now and Aug. 6, 2020, you'll earn $30 when you spend at least $30 shopping online through Rakuten within the first 90 days. Start earning cash back and claim a free $30 bonus today.

Read Next
How Much of My Social Security Benefit Can My Ex Take From Me?
How Much of My Social Security Benefit Can My Ex Take From Me?

A man wonders if his ex-wife will siphon away his Social Security benefit.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

6 Types of People Who Can’t Count on Social Security
6 Types of People Who Can’t Count on Social Security

If you fall into one of these groups, don’t assume that you will receive benefits.

This Pastime Can Keep Your Brain Sharp as You Age
This Pastime Can Keep Your Brain Sharp as You Age

It’s never too late to benefit from taking up this type of activity.

5 Simple Steps to an Awesome Retirement
5 Simple Steps to an Awesome Retirement

The path to your dream retirement begins with these five steps. How many have you already taken?

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
Will I Get My Ex-Husband’s Social Security When He Dies?
Will I Get My Ex-Husband’s Social Security When He Dies?

Two factors determine how much money is coming to you.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

16 Amazon Purchases That We Are Loving Right Now
16 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

5 Household Disinfectants That Can Destroy the Coronavirus
5 Household Disinfectants That Can Destroy the Coronavirus

You likely already have some of these products at home.

22 Things You Should Always Buy at a Dollar Store
22 Things You Should Always Buy at a Dollar Store

The dollar store has great bargains on these purchases.

20 Things That Are Actually Worth Stockpiling
20 Things That Are Actually Worth Stockpiling

You probably don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

6 Reasons I Will Never Trust Suze Orman
6 Reasons I Will Never Trust Suze Orman

Beware: The self-proclaimed personal finance expert has a track record that suggests more sizzle than steak.

America’s Most Reliable Appliance Brand Is a Surprise
America’s Most Reliable Appliance Brand Is a Surprise

Have you heard of this appliance manufacturer?

The Top 11 Jobs That Employers Want Retirees to Do
The Top 11 Jobs That Employers Want Retirees to Do

Tired of age discrimination? Businesses are clamoring for older workers to fill certain roles.

This Type of Social Security Benefit Is Often Overlooked
This Type of Social Security Benefit Is Often Overlooked

The Social Security Administration is not helping certain people get money to which they are entitled, a report says.

9 Everyday Problems You Can Solve With Vaseline
9 Everyday Problems You Can Solve With Vaseline

Forget expensive specialty products. Good ol’ petroleum jelly can address many common annoyances.

Getting These 2 Shots Could Reduce Your Risk of Dementia
Getting These 2 Shots Could Reduce Your Risk of Dementia

These vaccines may lower the risk of Alzheimer’s disease by up to 40%.

19 Purchases That Buyers Almost Always Regret
19 Purchases That Buyers Almost Always Regret

Think twice before buying these things.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

8 of the Worst Things to Buy at a Dollar Store
8 of the Worst Things to Buy at a Dollar Store

Not everything sold at dollar stores is a great bargain or a safe purchase. Here’s our list of products to avoid.

41 Things You Should Never Buy
41 Things You Should Never Buy

Some purchases are just plain dumb. Give yourself — and your budget — a break. Don’t spend money on this stuff.

9 Things That Are Free in August
9 Things That Are Free in August

As summer enters the home stretch, we’ve rounded up these sizzling freebies.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.