New FICO 10 scoring system incorporates trended data

Two different scores have been released as part of the FICO 10 suite, and they will be available to agencies in summer 2020


FICO has released a new scoring suite that will be available to credit reporting agencies this summer. One of the scores included in the suite will use trended data, marking a significant shift for the credit scoring firm.

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FICO has released a new scoring suite that will be available to credit reporting agencies beginning this summer.

There will be two distinct scores in the FICO 10 suite – 10 and 10T, according to a news release from the credit scoring firm, and the latter will use trended data.

It’s not yet clear how FICO 10 will differ from the firm’s previous scoring models. For instance, FICO 9, which was released in 2014, differed from its predecessor FICO 8 by deprioritizing medical debts and paid collections.

FICO 10T’s use of trended data signals a significant shift for the company, which in years past said there wasn’t much evidence trended data helped lenders or credit card issuers make decisions.

FICO competitor VantageScore started using trended data in 2017 when it released VantageScore 4.0.

According to FICO, lenders who use the new FICO 10 suite could experience 10% fewer defaults among new bank card accounts than with FICO 9. That will result in “more competitive” credit offers to customers, FICO said.

See related: Trended data: The new way credit bureaus rate you

Trended data gives lenders a different view of borrowers

FICO 10T will use trended data to show lenders something different about borrowers from their traditional information.

Trended data gives prospective lenders borrowers’ key balance and payment data for the past 24 months, which enables them to see consumers’ behavior trends and determine if they’re carrying balances, consolidating or paying off their balances each month.

“Many lenders want to leverage the most comprehensive data possible to make precise lending decisions,” Jim Wehmann, executive vice president for scores at FICO, said in a news release. “By offering a score that taps further into trended data, we’re able to give lenders greater flexibility and predictive power, as well as ease of integration.”

Lenders can make an easy transition to FICO 10

FICO said the new scoring suite will enable lenders to make an easy transition from using FICO 9 due to its compatibility with previous versions and the inclusion of standard FICO reason codes and “similar odds-to-score relationship as prior versions and consistent score ranges.”

Additionally, the firm said Equifax will begin using the FICO 10 suite in the summer, and Experian and TransUnion are expected to follow suit by the end of the year.

See related: Experian’s new credit score considers trended data, professional licenses

Don’t pay attention to score models, just practice good credit habits

Credit scores are important because they help determine whether or not you get approved for a loan or line of credit, and if you do, what interest rate you will be charged.

“And while credit scores have been rising overall, FICO says almost half of U.S. adults either have low scores or no score whatsoever, so there’s still a lot of room for improvement,” said Ted Rossman, industry analyst at

Rossman noted that credit is a big challenge for young adults, and it has gotten harder to establish a solid credit history in your late teens, early 20s and even beyond.

In fact, according to a 2019 survey from Bankrate, 58% of millennials have been denied at least one financial product due to their credit scores, compared with 35% of older adults.

Rossman said 2019 was a cautious year in the credit card industry, and 2020 is starting the same way.

Even though recession worries have waned in recent months, card issuers are concerned that the current economic expansion can’t last forever, and they don’t want to overextend themselves.

“We’re seeing some pullbacks on approvals and credit limits, along with less generous sign-up bonuses,” Rossman noted, “so lenders will be drawn to the much lower default rates the FICO 10 Suite is promising.”

Rossman said FICO 10T’s use of trended data basically means that they’re going to try to smooth out the peaks and valleys.

So, now, a temporary spending spike such as a vacation or holiday shopping won’t hurt your credit score as much if you generally keep your credit utilization low.

But change comes slowly in credit scoring model implementation, and the most-used formula is still FICO 8, which came out in 2009.

“Rather than getting too hung up on which model a particular lender is using, consumers should practice fundamental good habits such as paying their bills on time and keeping their debts low,” Rossman advised.

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