The company that created the industry-leading FICO score, Fair Isaac, has announced changes to its formula starting in 2008, MSN Money reported recently.
"As a result, some behaviors that may not have hurt your score much in the past could cause your numbers to plunge, while other actions could help you boost your score more than in the past."
Some examples of the changes include the following:
- Applying for new credit accounts may hurt less.
- Having high balances on your credit cards could hurt more.
- Actively using the credit accounts you have may be more important.
- Having both revolving and installment accounts on your report could help you more, as the new formula is more sensitive to your ability to handle different types of credit.