With the introduction of Fair Isaac Corp’s newest FICO 10 credit scoring model, it is expected that the credit scores of 110 million people will be altered by less than 20 points and the credit scores of 80 million people are likely to increase or decrease by at least 20 points. As made evident by those two statistics, the implementation of this new credit scoring model is going to have a significant impact on a large amount of people. 

The following will provide helpful information regarding the possible negative impacts that people with poor credit may experience as a result of this new model, as well as different ways that people could potentially increase their credit scores.

Negative Impacts of the New FICO 10 Model

While those with good credit scores will likely see their credit improve as a result of this model, people with bad credit are expected to see their scores decrease even more. The major difference between this model and previous FICO models is that scores will now take debts into account when they are being calculated. Considering that U.S. household debt levels have been rising over the past few years to around $13.95 trillion in September of 2019, experts are estimating that the new model will likely result in many borrowers experiencing drastic credit changes. 

The following types of people are highly susceptible to having their credit negatively impacted by FICO 10 model:
 

1. Those who have not been able to make debt payments on time.

2. Those who have taken out personal loans, as they are not as secure as other types of loans.

3. People who have recently suffered a decrease in their financial credibility.

How to Improve Your Credit Score

While the majority of lenders and banks are still transitioning to the new FICO 10 model, it is important for all consumers to know some basic information regarding how to improve and maintain a good credit score.
 

1. Create and abide by weekly/monthly budgets

2. Make all payments on time

3. Do not make costly purchases that you are not able to pay off

4. Avoid unnecessary purchases

5. Consult financial experts who specialize in debt relief assistance and financial advising, such as the experts at Progressive Debt Relief

Progressive Debt Relief Is Here to Help

Here at Progressive Debt Relief, we know how having a poor credit score can lead borrowers to make desperate financial decisions, such as taking out payday loans, to help pay off their debts. That’s why, for over a decade, Progressive Debt Relief has been providing our clients with a beneficial service that focuses on settling all of your debt related issues as efficiently and effectively as possible. Our client-first mentality is one of the reasons why we offer free consultations and no upfront fees. Our team of financial experts are dedicated to alleviating your debt-related stress by personally negotiating with your creditors. Take the first step by contacting us today 877-590-1847.