What is this New FICO 8 Credit Score System?

The new FICO 8 Credit Score was introduced by Fair Isaac Corporation (FICO), the pioneer of credit scoring system, on 27th of July, 2010. The FICO 8 credit score system is a bit different from others that are there in the market. It rather benefits to both lenders or credit cards, and the consumers too. There are ways in which it benefits the consumers with its difference from others.

1. LATE PAYMENTS: This system lets the consumers to make late payments in cases where they can’t make payments anyhow sometime. It should not be misinterpreted that, it is always so. It penalizes the defaulter even worse he can ever imagine. The system’s being liberal should not be taken for granted at all. This system is especially for those who get their mail late than expected. It in turn provides enough room for the client to get out of bad credit as soon as possible.

2. SMALL DEBTS: This system is quite lenient about small debts, under $100; those are in collection or public record. It hardly pays attention to those small debts. In fact, this helps the consumer enough time to fix bad credit he’s possessing.

3. CREDIT USAGE: For people whose debt to credit ratio, the consumer can hardly imagine how the FICO 8 credit score system can be strict. Those with higher credit card balance with respect to the spending limit, the FICO 8 interrupts and deals with it severity. This in turn lowers the credit score.

4. AUTHORIZED USERS: FICO 8 is efficient enough in piggybacking. Piggy backers are those who enlist their names in someone else’s account (with higher credit limit), as an authorized user of the account. These people are usually the consumers with bad credit, who intends to web the actual user to access his account and get benefits of it, by using the legitimate account holder’s credits for his needs.