Credit Scoring Changes in 2009

December 31st, 2008 by Sara

Here’s a must-read about coming changes in credit scoring from personal finance expert Liz Pulliam Weston. Lenders will start using the new scoring system by late January.

The new FICO scoring system (the one most lenders use) will be more sensitive than ever to the gap between how much credit you have and how much you use.

So remember, don’t max those cards, and don’t close accounts.

It will also be more forgiving of small collection accounts of amounts less than $100.

Again, because so many lenders use FICO (Pulliam Weston says 75 percent of mortgage lenders and 90 percent of the largest lenders), make sure any site you’re requesting a credit report from advertises a legitimate FICO score.