Credit Scoring Rules Are Changing

Credit scoring rules are changing.

In the past, your FICO scores were determined by comparing your behavior to others with similar characteristics. If someone with similar demographics who used credit like you went bankrupt, your score was lowered whether or not you were in financial trouble. And vice versa. If they did well, you were scored well, whether or not you teetered on the brink of insolvency.

However, as ABC News reports, banks are using new factors in determining your credit worthiness.  

Since 9/11, new laws and technology make data mining much easier and more efficient. Banks have taken advantage of this by employing behavioral analysis. They’re looking at not only yodur purchasing history now but also where you shop, as well.  

Some consumers have found their credit lines suddenly reduced.

Declining credit lines tend to reduce credit scores. And of course, this effects how you qualify for a mortgage.

When contacting the offending banks, affected consumers only receive the explanation that they were shopping at places where people in financial trouble were, as well.

It remains unclear what businesses are triggering this. Is Walmart a danger spot? Or Amazon.com? Both have been on purchase history lists of those with declining credit lines.

The rules for determining credit scores have gotten more complex and a bit more murky.

More at: New Credit Rules