FICO changes could lower 40 million credit scores

Andie Corban and Kai Ryssdal Jan 23, 2020
Share Now on:
HTML EMBED:
COPY
Fox Photos/Getty Images

FICO changes could lower 40 million credit scores

Andie Corban and Kai Ryssdal Jan 23, 2020
Fox Photos/Getty Images
Share Now on:
HTML EMBED:
COPY

The Fair Isaac Corporation is changing how it calculates the most widely used credit score, the FICO score. Overall, about 110 million people will see their scores change, with about 40 million scores falling under the new method, which could go into effect this summer.

“Marketplace” host Kai Ryssdal spoke with Dorothy Kelly, who teaches personal finance at the University of Virginia, about the announcement.

“The big change is it’s going to not look at your balances for one month,” Kelly said. “It’s going to look at your balances over 24 months.”

This new model is designed to give lenders more insight into how consumers are managing their credit and debt, which is at record highs.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.