As of early 2009, two of the three major credit bureaus (Equifax and TransUnion) will be employing a new scoring model. Fair Isaac, creator of the FICO credit score, has tweaked their system in an attempt to reduce the risk of defaults. It’s estimated that 40-50% of borrowers’ scores could move by +/- 20 points.
As always, Fair Isaac is keeping details of their algorithm secret, though it’s known that they’ll be increasing the number groups into which borrower are classified from 10 to 12, allowing them to better account for the number and magnitude of credit problems that people have. This will allow them to better distinguish between people with infrequent credit problems and habitual offenders. The new model will also focus less on the number of accounts that someone has and more on the amounts that they owe.
Another interesting point is that it will be possible to establish credit by “piggybacking” (i.e., being an authorized user on someone else’s account). That being said, Fair Isaac intends to make that process “harder and lengthier.”