Hi, I'm Jodie Cordell from Spence Properties. I am the savvy agent. And today I'm here to talk to you about the changes in the credit score and how they are going to affect you while you start trying to look for a new home.
These changes will arrive basically in the summer of 2020 this year. And it's the way that a Fair Isaac, who comes up with the FICO score, scores your credit in order to give you that score. So those changes could affect the way that you shop for a home this year, among other things. So let's talk about what the changes are and how they're going to affect you.
The first thing that you should know is not all lenders use the same FICO scoring system. There's been several updates to the system. And the one that's coming out this summer is actually FICO 10 now. Many lenders are still using 9, and will continue to do so for quite a while. Some are still using FICO 8. So it's kind of like an operating system where not everybody has caught up to the new changes yet. So don't expect all of them to implement this brand new system come the beginning of the summer. You still got some time.
So who is this going to affect and how? Well, what they started to implement for this new system is trending data. So what they want to do is go back and look at your overall spending habits and your debt to credit ratio, and how well you're able to keep up with your bills and keep your payments on time and keep your credit down low. If you are one of those people who's somewhere in the mid to upper 600s, and you're actually paying your bills on time and your credit is trending, your debt is actually trending down and you're in an upward trajectory, you're actually probably going to see some positive changes to your credit score as lenders start using the new system.
If you're someone who is below the 650 line, probably somewhere in the lower 600s, and paying your bills on time is a little bit of a struggle. You might be just a little bit outside of your means. This could actually hurt you with these new trending data implementation in the system. So if you are having trouble getting your bills paid every month and making sure that you keep your debt down, especially that expensive debt, the one with the higher interest rates, it might be a great time for you to sit down and reevaluate how you're spending your money each month. And it might be a great time to start kind of pulling back the reins on some spending so that you can get rid of some of that other debt.
So overall it looks like it's going to be very beneficial to those who are working towards getting their debt paid down and keeping their bills paid on time. So the great news though is that this system, like I said, is not going to be implemented right away. It's coming out this summer, summer 2020, and it's going to take some time for all the lenders to jump on board and start implementing the new system. That actually means you've got some time to kind of focus in on what matters the most right now with the new system coming into place. So if you're already one of those who pays your bills every month on time and you're bringing down your debt, you're doing a great job, keep doing that. It's actually just going to be a nice little reward for you on the end.
If you're one who is struggling to get your bills paid every month, now's a great opportunity for you to start kind of rearranging your financial situation. Start making those payments on time so that you have a record of a trend basically. 'Cause that's what we're looking for is trending data. For anybody though in this situation, now is a great time to just reevaluate where your finances are and start making some positive changes to see some positive effects come your way.
So I hope that helps you with the new FICO 10 trending data scoring system that's coming out. And I hope it helps you with any of your future mortgage loans, auto loans, any bank card loans, all of that. The FICO score is used in almost all credit evaluations. So anything that you can do to help improve that, I hope that this helps you figure out a way to do that.
And if you have any other questions regarding real estate and mortgage loans, please feel free to reach out to me at any time. You can click on this video and respond to the video, or just reach out to me directly. I'm going to put my information right down here. And if you like the information that I'm sharing with you, please hit subscribe so you get all the juicy tidbits that I'm going to be sharing with you from time to time.
And until next time, my name again is Jodie Cordell. I am the savvy agent. And I'm here to help you live where love, and love where you live.
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