FICO Scores Are Changing — What You Need to Know

The credit-scoring company Fair Isaac — creator of your good friend (or frenemy) the FICO score —  is making some changes that could affect your credit score, especially people who have lower credit scores. And these new FICO scoring changes could make it harder for you to get loans or decent rates from most lenders. MoneyLion still has you covered with low-APR credit builder loans, though — more on that below.

Fair Isaac Is Changing FICO Scores

These latest Fair Isaac changes could create a bigger gap in the credit score continuum between good credit and bad credit. So if you already have good credit, this new rating system could actually boost you higher. But if you have lower credit, say below 600, and aren’t taking steps to improve your credit (such as paying on time with a credit builder loan), your score could take a hit. 

Thankfully, MoneyLion’s Credit Builder Plus loan not only helps you build your credit, it’s also available without a credit check. Learn more here, including how 70% of people who take the MoneyLion credit builder loan raise their score by over 30 points in their first 60 days.

What’s Happening with FICO Scores?

Here’s what’s happening with FICO scores: Fair Isaac company will soon start dinging consumers’ credit scores more severely if they are taking on higher debt and/or falling behind on loan payments. Specifically, FICO is going to start paying more attention to unsecured personal loans, as the number of these loans that consumers have taken on recently has skyrocketed, as well as penalizing late payments more harshly.

As you know, your on-time credit and loan payments already make up 35% of your FICO score. So on-time payments are one of the best ways to build your score. And now the expectation is that FICO is going to start making late payments even more detrimental to your credit score. Even more motivation to pay on time. More details about the specific FICO model changes can be found in this USA Today article

How Can I Improve My FICO Score Now?

With MoneyLion’s Credit Builder Plus membership, you get a competitive APR on credit builder loans up to $1,000. Then we time your payments to your pay dates and deduct the payments from your preferred account automatically. This all makes it much easier and more manageable to pay on time. Plus, the membership gives you access to 0% APR Instacash advances when you need extra cash. We also report your loan payments to all three credit bureaus to help build your score via good payment history. And you know FICO will be watching.

Also, given that Fair Issac will be paying more attention to your amount of debt, which includes your credit utilization, it’s ideal to pay extra attention to your credit utilization rate (the amount of available credit you use). Don’t max out those cards or open too many. More tips on that here, including using the MoneyLion app to track your credit score.  

Why is Fair Isaac Changing FICO Scores? 

Fair Isaac may be anticipating a potential downturn in the economy and expecting lower consumer confidence — and perhaps an increase in risky consumer borrowing. And they may even be readjusting for the fact that in 2018, when FICO and other credit-reporting companies made changes that helped increase scores for some consumers, it contributed to credit scores being at their highest in 2019.

Maybe they think it’s getting too easy to have a good credit score?! Hardly! Unless you have a credit builder loan, of course. 

More Tips on Boosting Your FICO Score 

These FICO changes may sound scary, but experts anticipate that they won’t swing consumers’ credit scores more than 20 points in either direction. And if you make a plan for boosting and maintaining your credit score, such as keeping credit utilization healthy and paying on time, you’ll get in great shape to continue building your score and borrowing responsibility. 

Learn more from our other articles on credit building:


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Current Credit Builder Plus membership required for Credit Builder Plus loan eligibility; the $19.99 monthly fee will be withdrawn from your linked bank account.  All loans are made by either exempt or state-licensed subsidiaries of MoneyLion Inc. The Credit Builder Plus loan may, at lender’s discretion, require a portion of the loan proceeds to be deposited into a reserve account managed by ML Wealth, LLC and held by Drivewealth LLC, member SIPC and FINRA. The funds in this account will be placed into a money market cash management or FDIC bank sweep vehicle, and may generate interest at prevailing market rates.  You will not be able to access the portion of your loan proceeds held in the credit reserve account until you have paid off your loan, and so long as your Credit Builder Plus membership payments are current. If you default on your loan, your credit reserve account may be liquidated by the lender to partially or fully satisfy your outstanding indebtedness. May not be available in all states.Credit Reserve Accounts Are Not FDIC Insured • No Bank Guarantee • Investments May Lose Value. For important information and disclaimers relating to the MoneyLion Credit Reserve Account, see Investment Account FAQs and FORM ADV.

A Credit Builder Plus loan may or may not improve your credit score. Credit scores are the result of your personal credit practices.

Cash advance requires current membership in Credit Builder Plus ($19.99 monthly fee) or Instacash with Banking ($9.99 monthly fee) membership programs. Instacash with Banking monthly fee is waived for members who connect and maintain recurring eligible direct deposits into their MoneyLion Checking Accounts. All Credit Builder Plus and Instacash with Banking members are automatically eligible to access either $25 or $50 of cash advance, depending on creditworthiness.  Members can increase their cash advance limit to up to $250 by connecting and maintaining recurring eligible direct deposits into their MoneyLion Checking Accounts and after up to three consecutive direct deposits have cleared, or at MoneyLion’s discretion. See Membership Agreement and Cash Advance FAQs for more information.

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