Here’s What You Need to Know About FICO Score 9
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ExpertiseHarrison Pierce is a writer and a digital nomad, specializing in personal finance with a focus on credit cards. He is a graduate of the University of North Carolina at Chapel Hill with a major in sociology and is currently traveling the world.
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FICO Score 9 is a credit scoring model developed by the Fair Isaac Corporation (FICO). It was first introduced in 2014 and is the latest version of FICO’s credit scoring model. While FICO Score 9 is the latest version of the FICO credit scoring model, it is not yet exclusively used by lenders. Many lenders still rely on earlier versions of the FICO score, such as FICO Score 8 or even older versions.
In this article, you’ll learn:
What is FICO score?
A FICO Score is a type of credit score used by financial institutions to assess the creditworthiness of an individual. It is calculated by the Fair Isaac Corporation using a proprietary algorithm that considers various factors such as payment history, credit utilization, and length of credit history. The score ranges from 300 to 850, with higher scores indicating a lower risk of default. A FICO Score is widely used in the U.S. and is considered one of the most critical factors in determining creditworthiness.
Related: FICO score vs. Credit Score
What is FICO score 9?
FICO Score 9 is the latest version of the FICO credit scoring model. It was introduced in 2014 and is used by many lenders to determine a borrower’s creditworthiness. The FICO Score 9 model includes some changes and improvements compared to earlier versions of the FICO Score.
How is FICO score 9 different?
There are several ways the FICO score 9 differs from previous versions.
1. Medical debt
In FICO Score 9, medical debt is treated differently from other types of debt. Specifically, the model places less emphasis on medical collections when calculating a credit score. This means that medical collections will have a smaller impact on a person’s credit score than other collections.
FICO Score 9 also differentiates between medical collections that have been paid off and those that have not. Paid-off medical collections will have less impact on a credit score than unpaid medical collections. This contrasts previous versions of the FICO Score, where paid-off and unpaid collections were treated the same way.
Additionally, FICO Score 9 also considers that medical debts often arise unexpectedly and may be beyond a person’s control. As a result, it looks at how much of the person’s total outstanding debt is made up of medical debt, and if it is significant, it may have less impact on the person’s score.
It’s important to note that while FICO Score 9 treats medical debt differently, it is still a factor that lenders consider when evaluating creditworthiness.
2. Paid collections
In FICO Score 9, paid collections are treated differently from unpaid collections. Specifically, the model places less emphasis on paid collections when calculating a credit score. This means that paid collections will have a smaller impact on a person’s credit score than unpaid collections.
FICO Score 9 also differentiates between paid collections that are medical and those that are not. Paid-off medical collections will have less impact on a credit score than other types of paid-off collections. This contrasts previous versions of the FICO Score, where paid-off and unpaid collections were treated the same way.
Additionally, FICO Score 9 looks at how long ago the collection was paid off, and it will have less impact on the score if it was paid off long ago. Although FICO Score 9 treats paid collections differently, it is still a factor that lenders consider when evaluating creditworthiness.
3. Rent payments
In FICO Score 9, rent payments are treated differently from other types of payments. Specifically, the model includes rent payments in calculating a credit score. This means that rent payments will be considered when determining a person’s creditworthiness. This is a change from previous versions of the FICO Score, where rent payments were not considered.
FICO Score 9 uses alternative data, such as rental payments, to give lenders a complete view of the borrower’s creditworthiness. Considering rental payment history can help people who may not have a traditional credit history, such as a credit card or loan, establish credit.
Keep in mind that not all landlords or rental companies report rental payment information to the credit bureaus.
When do lenders use FICO 9 credit score?
Lenders use FICO Score 9, or any other credit score model, as part of their risk assessment process when evaluating a loan application. They use credit scores to determine a borrower’s creditworthiness, which indicates their ability to repay a loan.
The use of FICO Score 9, or any specific version of FICO score, depends on the lender’s policies and procedures. Some lenders may use the latest version of the FICO Score, while others may use an older version or another credit scoring model altogether.
It’s also worth mentioning that lenders widely use the FICO 9 credit score in the U.S., but it’s not the only option available. Some lenders may use other credit scoring models, such as VantageScore, a joint venture between the three major credit bureaus (Equifax, Experian, and TransUnion). And also, the use of credit score models may vary depending on the type of loan or credit product, the lender’s risk appetite, and the regulatory requirements.
Where can I get my FICO 9 score?
You can get your FICO Score 9 from several sources. One way is to purchase your FICO Score 9 directly from the Fair Isaac Corporation (FICO) website. They offer various options for purchasing your score, including a one-time purchase or a subscription service.
Many credit card issuers, banks, and other financial institutions now provide their customer’s free access to their FICO Score 9 as part of their online account management tools. This can be a convenient way to check your score regularly without paying an additional fee.
You can also get your FICO Score 9 from credit reporting agencies such as Equifax, Experian, and TransUnion. Some of these agencies also offer a subscription service that allows you to monitor your score regularly.
Understand that not all sources will provide you with your FICO Score 9. Some may give an older version of the FICO score or another credit scoring model like VantageScore. Also, the score provided by different sources might not be the same, as it could be influenced by the type of data used to calculate it and the scoring model used by the source.
To check your VantageScore 4.0, you can utilize various credit monitoring services or you can check it on Credello’s own tool. It is important to review your credit report regularly and ensure its accuracy, as any errors or discrepancies can harm your credit score. By monitoring your VantageScore 4.0, you can track your credit progress and take the necessary steps to improve it.
FICO 9 vs FICO 8 score
FICO Score 9 and FICO Score 8 are both credit scoring models developed by the Fair Isaac Corporation (FICO) to determine a person’s creditworthiness. However, there are some critical differences between the two models.
FICO Score 9 is the latest version of the FICO credit scoring model. It was introduced in 2014, while FICO Score 8 is an older version that was first introduced in 2009.
One of the main differences between the two models is how they treat medical debt. In FICO Score 9, medical collections are given less weight than in FICO Score 8. This means that medical collections will have a smaller impact on a person’s credit score in FICO 9.
Another difference is that FICO Score 9 separates the impact of a single late payment on a credit score from the impact of multiple late payments. This means that a single late payment will have less effect on the score than multiple late payments would have in FICO 8.
FICO Score 9 also incorporates trended credit data, which allows lenders to see how a borrower’s creditworthiness has changed over time, while FICO 8 doesn’t.
FICO score vs. credit score
FICO Score and Credit Score are used to determine a person’s creditworthiness, but they are not the same.
FICO Score is a credit score designed by the Fair Isaac Corporation (FICO). It is calculated using a proprietary algorithm that considers various factors such as payment history, credit utilization, and length of credit history. The score ranges from 300 to 850, with higher scores indicating a lower risk of default. FICO Scores are widely used in the US and are considered essential factors in determining creditworthiness.
On the other hand, a credit score is a general term that refers to any type of score used to evaluate a person’s creditworthiness. In addition to FICO Scores, there are other types of credit scores, such as VantageScore, a joint venture between the three major credit bureaus (Equifax, Experian, and TransUnion), and various other models used by different lenders and institutions.
While FICO Score is widely used, other credit scores may also be used by lenders and institutions. Some credit scores are also developed and provided by credit reporting agencies like Equifax, Experian, and TransUnion. They may use different data, scoring algorithms, and scoring ranges, which means that credit scores can vary depending on the source and the model used.
Learn more: FICO Score vs. Credit Score
FAQs
FICO Score 9 is used by many lenders to determine a borrower’s creditworthiness. This includes financial institutions such as banks, credit unions, mortgage companies, and other types of lenders such as auto loan providers and credit card issuers.
FICO Score 9 is widely used in the US and is considered one of the most critical factors in determining creditworthiness. It is used to assess the risk of a borrower defaulting on a loan, and it helps lenders decide whether to approve a loan application and what terms and interest rates to offer.
FICO Score 9 is not only used by lenders but also by other financial institutions, insurance companies, landlords, and employers. They use credit scores to assess the risk of a borrower defaulting on a loan or to evaluate the creditworthiness of a tenant or employee, to decide whether to approve the loan application, rental application, or job application and what terms and interest rates to offer.
FICO Score 9 is a widely used credit scoring model considered reliable by many industry experts. It was introduced in 2014 and is intended to be more predictive and accurate than previous versions of the FICO Score. FICO Score 9 uses more recent credit data and places less weight on certain negative factors, such as medical collections. However, it is essential to note that a credit score’s reliability can depend on various factors, including the accuracy of the credit report and the specific scoring model used by a lender.
FICO Score 9 updates as often as the underlying credit data changes. The credit bureaus, such as Experian, Equifax, and TransUnion, update their credit reports regularly, usually at least once a month.
When a lender requests a credit score, the score is generated based on the most recent credit data available. So, in general, the more often a person checks their credit score, the more likely it is to be up-to-date.
The most widely used FICO score is the FICO Score 8. It is the most recent version of the FICO Score before the FICO Score 9, and it is the version that lenders and credit issuers have most widely adopted. FICO Score 8 was introduced in 2009 and is considered more predictive and accurate than previous versions of the FICO Score. Many lenders and credit issuers continue to use FICO Score 8, even though FICO Score 9 has been introduced. This is because many lenders have invested in systems and processes that use FICO Score 8, and they may not want to incur the costs of upgrading to FICO Score 9.