Credit Changes You Need to Know

TC Franchise, franchise funding, kip garwood-tullYou need to know about the new credit changes. You may be able to finance your dream franchise!

There are varieties of ways to fund your new business (overview)  Most are going to heavily depend on your personal credit score. The good news is that there will be a new way to calculate credit scores

According to a Fair Issac Corp stated” that it is changing its widely used FICO credit-score calculations. The company plans to lighten up on consumers, making it easier for millions of borrowers to look better on paper.

Experts say this will be good for the economy, affecting everything from homebuying to back-to-school shopping (to franchise start ups). The changes taking effect shortly “will increase the credit scores of many, some substantially. For those consumers, credit will be easier to obtain,” Judith Fox, director of the Notre Dame Law School Economic Justice Clinic, said in a written assessment.

Here’s the deal: Fair Isaac is a San Jose, Calif.-based company that compiles mountains of data to create a sort of report card for borrowers. The FICO credit scores are used by banks, credit card issuers, mortgage brokers, auto lenders, insurers, merchants and health care providers to predict whether you will pay bills on time over the coming two years.

The score typically ranges between 300 and 800. that “a higher credit score is taken to mean you are less of a risk, which, in turn, means you are more likely to get credit or insurance — or pay less for it.”

…Fair Isaac says that going forward, its calculations will stop including information about any bill that has been paid off or settled with a collection agency. Also, scoring calculations will give less weight to unpaid medical bills that are with a collection agency. “This will help ensure that medical collections have a lower impact on the score, commensurate with the credit risk they represent,”Read complete article

A good goal is to keep your credit score above 700. If you have not checked your credit score lately, it is worth your time to check it again. Tips

Posted in Franchise Financing, Franchise News.