Credit scoring models are always evolving as credit rating agencies are constantly on the lookout for ways to better predict future financial distress. The agencies look at various metrics that logically portend financial difficulties and, ultimately, slow or no pay on consumer debt. The search is for data that has the most predictive power. As further evidence of this, there is now a brand new credit score, called the FICO Score 9.
Here is a recent article on how the FICO Score 9 takes into account medical debt, paid-off collections and rental history. The good news is that medical debt is now weighed less heavily in the calculation, whereas rental history is now given additional weight. Paid-off collections appear to be taking a lesser role in credit scoring.
It is still too early to determine to what extent lenders will adopt FICO Credit Score 9, but as the article predicts, more and more lenders will likely be using the FICO Score 9 as opposed to older scores.
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