Credit Score System Rating Changes in 2009

Learn About Credit ScoreThe Fair Isaac, or FICO®, credit score rating system is used by the three major credit agencies as a way to determine an individual's standing in the general range of credit risk. The system, a mix of various risk factors, is updated from time to time to reflect emerging business and consumer conditions, as lenders work through the most current situations to evaluate how and when to dole out credit to consumers.

Senior staff at the Fair Isaac Corp., the company that created the credit rating system, talk about "re-weighting the FICO® algorithm" and say changes in how FICO® works occur periodically to reflect new consumer or market practices and realities.

These days, as consumers tighten their belts, lenders have also cut down on the liberal extension of credit, sometimes by deleting unused credit lines or lowering credit limits that seem inflated.

Experts suggest the change in the FICO® score system in 2009 will be toward a better understanding and accommodation of new consumer credit practices, a FICO® model change toward a more moderate system of lending. However, as it stands, there are still a lot of risk factors that can affect consumers broadly, and individual consumers may need to use their financial wits to stay above the fray.

It can be a challenge for any member of the general public to stay up on the changes occurring in the system employed by the big credit agencies and lenders. Public awareness initiatives often seem woefully inadequate to the task of keeping individual consumers and households up-to-date on how various events are affecting their FICO® score and credit ratings.

Good credit practices for maintaining an adequate credit history include keeping credit lines active, using only a portion of your credit line (about a third is often recommended), and generally making prompt payments. Staying current on paying off your credit lines from month to month is always a good idea, whether you're concerned with today's current system or any updates that FICO® may make to the system in 2009. Tools like credit report monitoring can also help you navigate through any changes to the FICO® system and capitalize on the way 21st-century America does business.


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