Friday, January 16, 2009

FICO 720: Top Shelf No More?

I'm currently reading Suze Orman's latest scribble, Suze Orman's 2009 Action Plan: Keeping Your Money Safe & Sound. Here's a bit from page 37 which caught my attention:

A year ago, I would have told you that a score of 720 or better was all you needed to get the best loan offers. But the fallout from the credit crisis has meant that the top tier has actually been pushed higher; some mortgage lenders reserve their best rates for individuals with FICO scores above 760. Unless you plan on buying a house in 2009, I wouldn’t worry as long as your score is at least 720. That’s still plenty good enough to keep most creditors happy.

I've been harboring the idea that "720 and above" marked the top level of FICO scores also, as far as lenders were concerned. But it doesn't surprise me that this High-Water Mark has now moved to FICO 760, if what Suze asserts is correct. (Although her comments seem to suggest this is primarily for mortgages.)

Full-blown economic hurricanes have a way of making banks reassess their lending practices. (Ain't that an understatement?)


— Posted by Michael @ 8:35 AM


Everything about the FICO score is a moving target: the parameters, the lender requirements, lender modifications of the score, etc. The credit industry uses credit scores to manipulate our behavior. We consumers just roll over and let it happen to us.

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