The Balanced Spreadsheet-Financial News, Budget Advice, Debt help, Financial Tips, and other advice

November 30, 2009

FICO reveals how certain financial events affect your score

Filed under: News Review, Personal Finance, Uncategorized — Tags: , , , , — thebalancedspreadsheet @ 6:09 pm

After years of mystery surrounding how certain financial events affect your credit score, FICO is revealing how some mistakes change your score according to an article by Jeremy M Simon of  The article titled “FICO reveals how commons credit mistakes affect score” is an interesting read.  I am not a huge fan of the FICO and do not believe it is the end all and be all in determining your credit worthiness but I do feel it is important to pay your bills all the time and have clean credit.

It is interesting to see how the different financial events lower your scored.  Obviously Bankruptcy and Foreclosures are an atomic bomb to your score.  But it is also interesting to see how debt Settlement lowers your score.  It is actually pretty close to a foreclosure in terms of lowering your score.  It will be interesting to see what happens in a few years when all the people who are short selling their homes recover enough to buy another house.  Will they take longer to qualify again for a mortgage or will the banks have easier standards considering this will affect many applicants?


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