ROCHESTER, Minn. (FOX 47) -- The way your credit score is calculated is changing. If you don't know, the popular "FICO" credit score is key to getting a loan for a car or a house, and even a credit card.
The new FICO credit score model is just being rolled out this week and it could take up to six months for consumers to notice a change in their score.
One of the big changes, is that your score will now reflect your credit behavior over the past two years instead of the "snapshot" look at your current activity.
Also, the new model will look more at a person's unsecured debt, like credit cards, instead of secured debt like student loans or a mortgage. One thing that isn't changing is keeping track of whether a person is making regular and timely payments.
"One of the big pieces of what goes into your credit score is called credit utilization," said Tamsen Leimer, F&M Community Bank Vice President of Business Banking. "So credit utilization is how much credit you have available verses the balance of credit that you have. The lower the credit utilization, the better it is for your FICO score. Also repayment history is a big thing. And the different types of credit that you have is a big thing that goes into making up your score."
FICO estimates about 110 million consumers will see a change to their score, with most seeing less than a 20 point swing in either direction. The new scoring model will also likely create a wider gap between those who are considered good credit risks and those who are not.
If you have any questions regarding your credit score, you can contact your local banker.