New FICO Math will effect your credit score

Fair Isaacs Corporation, the people that create the credit score models, have a new formula that can impact your credit score in the future.

This new math or formula is expected to do a better job of predicting whether or not you will default on a loan. The formula, called FICO 08, is also expected to be more forgiving for the occasional late payment, and more critical for those that are habitual late payers or non-payers.

Building ones credit history by 'piggybacking' will be difficult, if not impossible with this new formula. Credit 'piggybacking' is when someone adds another as an authorized user to their account. The repayment history is reflected on both users, however the primary account holder is obligated for the repayment where the 'piggybacking' party is not. This was a method used by many sub-prime borrower to artificially boost their credit scores.