My FICO (Fair Isaac Corporation) score had changed. FICO is by the way, a company that provides software to financial institutions. They have been offering this service since 1989.
For some reason our Consumer Financial Protection Bureau negotiated with FICO to change the way they calculate our scores. This apparently was to allow more people (who probably cannot afford to) to qualify for a mortgage. They will also be able to buy automobiles and qualify for credit cards.
The adjustment to our FICO scores is only about 25 points. Doesn’t sound like much does it? However, that is opening the door to further changes. And/or allowing people to over extend again. In the housing market, which is still groggy from its past upsets, this might well be asking for future financial fiascos.
I fail to see how the Consumer Financial “Protection” Bureau is indeed protecting anyone.
Today we have 3% interest rates and of course the 0% down payment (for those who qualify). With this new FICO factor in the mix, where are we heading?
The banks still have an unbelievable load of repossessed homes. Perhaps this FICO score adjustment will allow them to unload for now. But what of the future for these home buyers?