Ways your Credit Changed this Thursday

The FICO system changed this thursday with a new system to decide how credit-worthy you are. Despite these changes, most of the usual determinations are the same: Variety, Low Balance, Responsibility, and Paying on time.

New System:
1. Spouses and children can improve their credit score by being an authorized user on a credit card account, but that’s it. No more piggybacking off strangers.
2. Debts less than $100 that go to collections will matter less.
3. They will look at the total picture more. A single repossession, for instance, won’t matter as much if everything else looks good.
4. Having less available credit will drag down your score more.
5. Diversity matters more. A mix of healthy auto, personal and student loans would bring up a score.
6. Closing accounts will bring down the score.

Having a mix of accounts will be a bit of a pain because I just paid off my auto loan so I’ll only have credit cards and mortgage to base my score off of eventually.

In addition to the FICO changes, Experian is no longer offering FICO scores at all to consumers as of today, only to credit inquiries from businesses. Lame.