I recently read an article on the new FICO-08 score that is going to be adopted by credit agencies in the near future. The computation of the new score is different in some ways from the current scoring criteria, as discussed in the article. One of the variations is that the new score gives more stress on the different types of credit accounts you maintain, that is, revolving and installment accounts. Most people have revolving accounts in the form of credit cards, but not many, esp. young people, keep installment (or mortgage/loan) accounts that require paying off your balance over time by making fixed payments. The article asks us to consider opening such an account to better our scores. The link to the article: http://articles.moneycentral.msn.com/Banking/YourCreditRating/BuildAKillerCreditScoreIn2008.aspx Since I never had an installment account in the past or maintain one currently, will it be useful for me to take a small loan from a bank and keep an active mortgage account to help improve my credit scores? thanks, SJ
It probably would be but, you're assuming that FICO 08' will come into the fray. It is speculation that it will at this point, not a foregone conclusion. I'd wait to see if it happens and if anyone actually uses it before taking out a loan just for credit scoring purposes.
I agree with Apex on this point; do not worry about something that may or may not happen. It is best to stick to one of the fundamentals of credit; "only apply for credit when you need it".
