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<h2>The Restructured FICO Credit Scoring System</h2> <p> Owning a home is the American Dream. To do it, most of us have to borrow money from a lender. Our credit plays a big factor in whether a lender is going to give us the money to make that purchase.<br /><br />The FICO score is much discussed, but little understood. It is a mathematical calculation that takes in factors from your credit history such as payment timeliness and types of debt to produce a total score. Oh, and FICO has just changed.<br /><br />If you've every bought a car or home, you probably think you know everthing you need to about how a FICO score works. You don't. Why? Because the recent changes to the calculation change the way the game works.<br /><br />FICO has always been criticized for being a bit unforgiving and structured. So, do the new modifications change this? Well, the issues being focused on are really more oriented towards the weight of certain events.<br /><br />Historically, even one missed late payment could really hurt your FICO. The value given to one late payment was so high, that there was little difference between the score of a person who missed just one payment deadline and a person who missed many.<br /><br />Fair Isaacs appears to have taken this one late payment criticism to heart. The new calculation process does not hammer a borrower who has one late payment. On the other hand, it reduces the FICO scores of multipayment problem borrowers even more.<br /><br />When there is a system in place, there is always a way to trick it. The authorized user function of credit scores was one such trick. It has now been removed from all FICO calculations.<br /><br />The length of time you have had credit is now also given more value. This is apparently because the longer the record, the clearer the picture on what type of borrower you are. Open credit accounts early whenever possible.<br /><br />Whether you are just looking to get a credit card or something larger like a car loan or mortgage, your FICO score is going to play a big part in the process. Make sure you know what it is before you apply. <p style="margin-bottom: 0; margin-top:5pt"> <font face="Arial" style="font-size: 10pt">Article Source: <a href="http://www.ArticlesMaker.com">ArticlesMaker.com</a></font></p> <h3>About the Author</h3> Hal James writes about issues surrounding <a href="http://www.fsboamerica.org/Mortgage-Loans.cfm" target="_blank">the best fixed rate mortgage loans</a> for borrowers at FSBOAmerica.org.

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