New "FICO 08" score debuts

Posted by Joe on January 29th, 2009

Fair Isaac, the maker of the popular FICO score, announced that one of the major credit bureaus will begin offering a new version of the score called FICO 08. The new scoring methodology is expected to decrease some scores while improving others.

The new FICO 08 score was created provide more accurate scoring for those consumers with limited or damaged credit histories who may represent a larger risk to lenders than those consumers with more established credit. According to Fair Isaac, the net result of the evolving score is that consumers with more established credit histories should see slight increases in their credit score when calculated using this new methodology.

The catch is that it will likely be a very long time until this scoring system is widely in use. Lenders typically test any score changes extensively before they begin using them for important lending decisions. Additionally, TransUnion is the only one of the three credit bureaus that is offering the FICO 08 score as an option for lenders. Equifax is expected to begin offering the FICO 08 laster this year. It is unlikely that Experian will be offering this new score anytime soon as the company is currently engaged in litigation with Fair Isaac.

The original FICO score will continue to be the score that lenders use most for the foreseeable future. Equifax offers a free FICO score when you sign up for a free trial of credit monitoring service. You can learn more about Equifax and other credit report monitoring services at NextAdvisor.com.

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