Matt Listro Your Credit Repair Expert

Understanding FICO 08

On January 29, 2009 TransUnion rolled out and made available the credit-scoring model called FICO 08. This is the newest version of the FICO® credit score, which is simply a redevelopment of their widely used industry standard classic score. The long awaited release of this model is good news for lenders, low risk borrowers, and those with low credit card balances. It's bad news for piggybackers, companies that sell piggybacking services, consumes with a lot of credit card debt, and the flop of the century, so far, in the credit scoring world known as VantageScore.

FICO 08 will eventually be the industry standard credit score despite not being available yet from Equifax or Experian. We should see FICO 08 at Equifax before the fall and at Experian as soon as they start losing customers to TransUnion or Equifax. Experian has alluded to the fact that their ongoing litigation with Fair Isaac over VantageScore is causing some stress in their relationship and delaying the roll out of FICO 08. The problem is eventually lenders are going to get sick and tired of getting caught in the middle of the "Experian versus FICO" arm wrestling match and move their business elsewhere when they find out that Experian isn't offering the new gold standard credit scoring model. When that happens you will be able to time the FICO 08 implementation at Experian with the second hand on your favorite watch.

So what is so different about FICO 08 and the other versions of the FICO score? There are three primary differences of note. They are:

1. Negligible Collection and Public Record Exclusion - The newest FICO score will ignore any collections or public records with an original amount less than $100. It's important to note that for a collection to be bypassed by the score, thanks to the new logic, it has to be reported as a 3rd party collection agency account and not the collection department of a credit card company. If the collection shows up as "trade" then it will still count against your score even if it is less than $100. And, if the original amount was over $100 but it has been paid down to a current balance of less than $100 it will still count in your score. This is exceptional news for consumers who are haunted by low dollar collections caused by misdirected final utility bills and some insurance snafus.

2. Credit Card Utilization - Credit card utilization, the ratio of your current balances to your current credit limits on revolving credit card accounts, remains a highly important factor in your FICO credit score. However, in FICO 08 it takes on a whole new level of importance. Consumers who have balances that approach the reported credit limit will find their scores lower with FICO 08 than with previous versions of the scoring software. FICO's research has apparently discovered that consumers who are highly utilized with their credit cards are more risky than they were in the past, hence the more punitive treatment.

3. No Piggybacking Allowed - This new version of FICO apparently has the ability to determine if an authorized user credit card account is an attempt to game the credit scoring system through piggybacking, which is the process whereby a consumer with poor credit would pay to be added to the credit card of someone with good credit as an authorized user. Fair Isaac will not disclose how they're able to tell the difference between a legitimate authorized user account belonging to, say, a husband and wife versus one that has been made it to a credit report through other means, such as piggybacking. You will recall that FICO 08 was originally going to completely ignore all authorized user accounts. This new logic seems to split the difference between ignoring all authorized user relationships and doing nothing to discourage the use of piggybacking services.

So why does FICO 08 pose a problem for VantageScore? It's actually quite simple. As long as FICO keeps improving what they refer to as their "classic" risk scores the less compelling it is for a lender to test, let alone switch, to a new score brand. Implementing a new version of FICO is much easier than implementing a whole new scoring model, like Vantage. In fact, a company called SubscriberWise has already implemented FICO 08 not more than two weeks after it became available.

The best advice for consumers who will begin to be scored with this new FICO score is for them to continue to do what they're doing now. Continue to make all of your payments on time. Continue to work down your credit card balances as much as possible. Continue to apply for credit only when needed. If you can do all of these things then your FICO 08 score will be solid as a rock and, who knows, maybe your VantageScore will be solid too, although nobody will care.

:)

Matt

Toll Free: 888-NCFIXER (623-4937)

Toll Free Fax: 888-FAX-4020 (329-4020)

Local: 860-282-6181

330 Roberts Street 4^th Floor

East Hartford, CT 06108

credit repair company

Expert Credit Repair in Bozeman MT

National Credit Fixers: 330 Roberts Street 4th Floor East Hartford CT 06108 phone: 860-282-6181 www.nationalcreditfixers.com National Credit Fixers boasts of 12 years experience repairing low FICO scores. Whether your credit has been damaged by a foreclosure, bankruptcy, slow credit, collections, judgments, repossessions, etc. we can help. We are the experts in credit restoration and credit repair.

Do you need to fix bad credit? Then we can help. We work hard for ALL of our clients. Although we can not predict future results, we will work diligently to help you restore your good credit standing. We will help you delete any bad credit which may be inaccurate or unverifyable. We will also help you to establish new credit to improve your credit rating!

:)

Matt

Toll Free: 888-NCFIXER (623-4937)

Toll Free Fax: 888-FAX-4020 (329-4020)

Local: 860-282-6181

330 Roberts Street 4^th Floor

East Hartford, CT 06108

credit repair company

Expert Credit Repair in Manchester NH

National Credit Fixers: 330 Roberts Street 4th Floor East Hartford CT 06108 phone: 860-282-6181 www.nationalcreditfixers.com National Credit Fixers boasts of 12 years experience repairing low FICO scores. Whether your credit has been damaged by a foreclosure, bankruptcy, slow credit, collections, judgments, repossessions, etc. we can help. We are the experts in credit restoration and credit repair.

We offer Personalized... Not Computerized Credit Report Repair!

No two peoples credit reports are exactly the same! So, no pre-set computer program is going to be as effective as real, skilled credit report correction counselors. Period! At National Credit Fixers, we are real people working hard for our clients. Of course we use technology, but we do not rely on it to perform the task of credit report repair. We do not scan credit reports and have an automated system produce duplicate dispute letters to mail to the credit reporting bureaus. We have skilled counselors that analyze your credit reports, then determine the best possible plan for maximum results. Then we draft unique and individual letters to the credit reporting agencies or to the creditors, collections agencies, or courthouses, depending on your unique and individual needs. NO computer program can do that! When you call our office you will notbe patched through to a call center full of unskilled telemarketers that read a pre-written script of answers to the "most commonly asked questions".

National Credit Fixers is a reputable credit repair company that can legally remove negative items off of your credit reports and help you qualify for the best rates possible! Information contained in your credit file must be reported according to a law called the Fair Credit Reporting Act (F.C.R.A.). If the information isn't accurate or verifiable then it must be deleted. This means your FICO scores will go up as a result.

We use the Fair Credit Reporting Act (FCRA) which is a federal law designed to protect you from being "slandered" by creditors, collectors, and credit reporting agencies. According to the law, a disputed credit account must be accurate, complete, and verifiable for it to remain on your credit report.

All inaccurate, incomplete or unverifiable accounts must be removed or updated. We have removed bankruptcy, foreclosure, repossessions, late payments, charge offs, collection accounts, judgments, and many other negative credit items.

Average FICO score increase in 6 months: 50 points

Score increase in 35 days

10 points or more 93%

20 points or more 71%

50 points or more 20%

100 points or more 10%

Score increase in 90 days

10 points or more 97%

20 points or more 82%

50 points or more 35%

100 points or more 20%

There are too many factors that make up the credit score, so it is impossible to give you an accurate prediction of how much your score will increase. Since we do not know for sure which inaccurate items we are going to get removed, it is nothing more than a guess for us to tell our client how much their score will increase.

Matt Listro

Toll Free: 888-NCFIXER (623-4937)

Toll Free Fax: 888-FAX-4020 (329-4020)

Local: 860-282-6181

330 Roberts Street 4^th Floor

East Hartford, CT 06108

fix bad credit

New FICO Scores Abound, Three New Credit Scores Hit the Market this Month

1. The FICO Mortgage Score - This score is actually a variation of the FICO score currently available at Equifax, which is called BEACON. This new score, which comes at the request of players in the mortgage industry, is meant to give them a better understanding of credit risk posed by mortgage borrowers rather than just general credit risk across all different types of accounts. This new score is what's referred to in the credit scoring industry as an "Industry Option" score. The Industry Option score uses the standard FICO score as a foundation and then adjusts that score up or down based on the consumer's credit risk for a specific type of loan, in this case a mortgage loan. So, for example, if my FICO score at Equifax is 750 but I've managed my previous mortgage loans very responsibly it is likely that my mortgage score will be slightly higher. This is because I actually pose less risk to mortgage lenders because I've exhibited that I can manage mortgage debt based on previous experience, which is displayed on my Equifax credit report. This score will be available some time in April.

2. The FICO Auto Score - The industry option scores do not stop for just mortgage lenders. There is actually an entire suite of these scores available for other lenders as well. They are available for credit card issuers, auto lenders, personal finance lenders and installment lenders. TransUnion will be making the FICO Auto Industry Option score available immediately to lenders who loan money to consumers who are buying a car, new or used, or are refinancing an existing car loan. The new auto score is expected to easily outperform the previous auto score version at TransUnion. According to FICO, "auto lenders may be able to identify as many as 5 percent to 15 percent more potential delinquencies among consumers as they could with the previous FICO auto score." This increased predictive power will help to accomplish two things sorely needed in the auto-lending environment. First, it will allow lenders to loan more money into a dying auto market. And second, it will allow healthy auto lenders to loan deeper into the credit score pool because of the increased ability to identify the future bad accounts before they even make it to their books.

3. The FICO Bankcard Score - In addition to the auto score available at TransUnion FICO has also made available it's newest Industry Option score designed specifically for credit card issuers. This new score, called the Bankcard Industry Option, does the same things as the mortgage and auto versions, which is to give credit card issuers a better crystal ball to use when making decisions about whether or not to approved or deny credit card applications and whether or not to modify the terms of an existing credit card customer's account. It's my belief that of all of the industry specific scores, this is the most commonly used. According to FICO this newer score will also do a better job of identifying riskier credit card users than the previous version of the same score. According to FICO, "...testing found that the new scores could potentially increase issuers' delinquency prediction rates by 6 percent to 12 percent..." This is a significant improvement especially when you apply the average loss of a credit card account for a major credit card issuer who might have 30 million active credit cards in circulation.

One of the biggest hurdles to implementing one of these new scores is the work to accommodate a new, different scoring model. This is one of the reasons VantageScore, a product of the credit bureau's joint venture VantageScore Solutions hasn't done well. It's a different score with a different score range and likely performs very differently than a FICO score.

In order to make the transition from previous versions of FICO to these newer scores as painless as possible FICO has done a good job of keeping the structure of the newer scores identical to that of the older versions. The score range is still 300 to 850. And the new scores maintain the same set of adverse action codes, also commonly referred to as score factor codes or reason codes. They have also maintained the same minimum scoring criteria, which means if a bank has traditionally seen a 2% "no score" rate, they should continue to see the same.

FICO releases a new generation of scoring models every few years for each of the three national credit reporting agencies; Equifax, Experian and TransUnion. And in most cases it doesn't make the headlines when it happens. Given the current state of the economy and especially the credit environment any time a newer better score becomes available it seems to draw more attention. This probably won't change any time soon.

:)

Matt Listro

Toll Free: 888-NCFIXER (623-4937)

Toll Free Fax: 888-FAX-4020 (329-4020)

Local: 860-282-6181

330 Roberts Street 4^th Floor

East Hartford, CT 06108

credit repair company

I have only been on ActiveRain for 90 days - so if this has already been here then forgive me for re-posting - but it is still worth repeating!

:)

Matt Listro

Toll Free: 888-NCFIXER (623-4937)

Toll Free Fax: 888-FAX-4020 (329-4020)

Local: 860-282-6181

330 Roberts Street 4^th Floor

East Hartford, CT 06108

credit repair company