FICO Score 9 - What's the difference?

FICO® Score versions deviate from one another because each is based on a unique FICO Score formula. An individual’s credit profile can impact the magnitude and direction of that deviation. However, since the fundamental factors impacting a FICO Score are consistent across versions (see the 5 factors that determine a FICO Score), your FICO Score 8 and FICO Score 9 versions may fall within similar ranges.

Still, it’s possible that differences may occur between FICO Score versions due to how each version treats such factors as collections, high balances, etc. So it’s important to learn about the FICO Score 9 and why the FICO Score 8 and other versions might vary from it.

So… what are the key differences between FICO Score 9 and previous versions?

The FICO Score 9 formula has 3 primary items that are treated differently:

  1. Medical Collections. The FICO Score 9 version treats medical bills sent to collections differently than other debts in the sense that it doesn’t impact one’s credit as much as non-medical debt. FICO changed this from previous versions based on the fact that its research showed that unpaid medical accounts were less indicative of credit risk than unpaid non-medical accounts. This becomes very apparent when you consider the complexity of the national medical system. Some people may be charged with small medical collections that they might not have even realized they owe. Sometimes a small co-pay or doctor visit charge can end up with a collection agency and tarnish one’s credit score. Back when people couldn’t get insurance due to a pre-existing condition, they couldn’t find a way to pay the medical bills when huge health issues arose. It didn’t matter how responsible they’d been up to that point—their charges were put in for collection because the bills were just too high to pay.
  2. Paid Collections. This latest score version handles paid collections differently than before by disregarding any collection situations that have been paid off in full by the consumer.
  3. Rent Payments. With FICO® Score 9, rental payment history is factored into the score when a landlord reports the payments to one (or all) of the credit bureaus. This formula change can be helpful for those who have just started establishing a credit history because it provides lenders with another factor to review when making their lending decisions.

After over 100 million FICO Score 9 scores were pulled by lenders for testing, evaluating or making decisions, myFICO made this version available to our customers in February 2016.

“FICO® Score 9 is the most predictive credit score we’ve ever developed,” said Sally Taylor-Shoff, Vice President, Scores, at FICO. “It includes many important enhancements, such as a more nuanced treatment of medical collection accounts. With banks accelerating their adoption of FICO Score 9, we felt the time had come to make the score available directly to consumers. We know from our research that people want to see the scores their banks are using. FICO Scores are used in over 90 percent of US lending decisions. People want to know their FICO Scores.”

Although FICO Score 8 is still the most widely used FICO Score version, FICO Score 9 is gaining traction. For those seeking credit and have had score problems due to medical collections or even collections which were paid in full, FICO Score 9 is good news for them – especially when applying for credit cards or auto financing.

People are talking about FICO Score 9 at the myFICO Forum. See what they’re saying and how this new score might be able to help you!

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Rob is a writer… of blogs, books and business. His financial investment experience combined with a long background in marketing credit protection services provides a source of information that helps fill the gaps on one’s journey toward financial well-being. His goal is simple: The more people he can help, the better.

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