There's a new credit law - and a new FICO score, FICO 08. This new score promises to do a better job of predicting future credit risk. Here are what I believe to be the most important things that we consumers should be focused on in the next 24 months.
Continue to make your payments on time, regardless of what you read - Debt settlement companies would have you believe for them to serve you is to stop making payments. The theory is lenders who are not getting paid will be more flexible with customers who don't pay. The truth is, lenders want to work with their customers directly, this way they do not lose income to the debt settlement companies, thus they recover more of the debt payment and it allows you to avoid litigation if the credit card company grow tired of you avoiding them at a debt settlements company request.
Pay down your credit card debt to no more than 10% of the balance avilable - the new FICO score is more sensitive about your revolving debt utilization percentage. This means those of you who carry a high balance on your cards will suffer more as lenders continue to convert to this new scoring system. If you can not get your debt to 10%, pay it down as much as you can. Why? Lenders are being more critical about credit scores than in the last 3 years. A good score of 700 two years ago would have gotten you the best rate and terms on any loan. Today - aim for 750 - and a larger down payment.
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