New Credit Score Changes on the Horizon

In case you haven’t heard, there are new credit score changes on the horizon, which could affect millions of potential consumers in their loan approval process. The Fair Isaac Corp (FICO) credit score is used in ninety percent of U.S. consumer lending decisions and the new updates may mean higher credit scores for potential homebuyers. Higher scores better increase a borrower’s chance of receiving better terms on a home loan, which is wonderful news for those who may have been struggling in the past to obtain financing.

According to a study by the Urban Institute, thirty-five percent of Americans have debts and unpaid bills reported to collection agencies. After the FICO credit score changes take place, debts that go to collection agencies and get repaid, will no longer count against a consumer’s score, and medical debts will have a smaller effect on the score. The FICO score will also no longer include failures to pay bills when calculating a score, if the issue has since been resolved, according to the Wall Street Journal.

Talks of these changes to the credit score reporting are supposedly going to take place sometime this fall. If this change takes effect, it could continue to stimulate the economy and allow many borrowers a possible chance for more financing opportunities.

For more information on the credit score changes, it is best to speak directly to a local, experienced mortgage company. If you would like a personal referral to a qualified loan consultant, please contact the Russo Team today. – Frank

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