[!IMPORTANT] Industry Standard: While FICO 9 offers several consumer-friendly updates, FICO Score 8 remains the most widely used model for most credit card approval decisions.
FICO Score 9 is an updated version of the FICO credit scoring model released in 2014. While many lenders still rely on FICO 8, FICO 9 is gaining traction, particularly because of its more nuanced approach to collections and rental data.
Key Innovations in FICO 9
- Medical Collections: FICO 9 distinguishes medical collections from other types of debt. Medical balances have a significantly lower negative impact on your score than in previous versions.
- Paid Collections: If a collection account has been paid in full, FICO 9 ignores it completely. In earlier versions (like FICO 8), even a paid collection could linger and depress your score.
- Rental History: FICO 9 is designed to incorporate positive rental history into your score, provided the data is reported to the credit bureaus. This makes it easier for “thin file” borrowers to build a footprint.
Why Lenders Use It
Lenders who use FICO 9 are often looking for a more “fair” assessment of consumers who may have had medical emergencies but are otherwise responsible with their credit. It is widely used by retailers and some credit card issuers as a secondary or primary score.
AxeTip Recommendation
If you are applying for a card and know the lender uses FICO 9, ensure any old collections are settled; your score may see a much larger boost under this model than under FICO 8.
Other FICO Versions
- FICO Score 8: The most widely used model for credit card applications.
- FICO Score 9: Optimized for medical collections and rental history.
- FICO Score 10 & 10T: The latest model featuring trended data analysis.