FICO Score 9 – Why Fannie/Freddie Aren’t Using It
As of August 2014, the ever popular FICO score co. announced that it had undergone a change in the formula that calculates the score. The change specifically no longer penalizes consumers who have a payment history detailing collection of medical debt. The score is dubbed “FICO Score 9” and, at least on the surface, looks to improve the credit scores of millions of consumers.
Now, consumers with outstanding medical debt will be more likely to get approved for car loans, credit cards and other types of new credit. In fact, the new formula is expected to raise scores by an average of 25 points for those who qualify – and even an increase of as little as 25 points can make a big difference. But there’s one very notable thing about this new formula to take note of… Consider the fact that the two mortgage financing juggernauts, Fannie Mae and Freddie Mac, won’t be using the new FICO Score 9 to evaluate loan applicants – a fact that greatly impacts the qualifications of potential homeowners when it comes to credit score.