Americans struggling to pay their debts

Americans struggling to pay their debts

The Americans who have been struggling to pay their debt off may be seeing lower credit scores of Fair Isaac Corp., particularly in case they are going to miss the payments.

The company which is behind the credit score known as FICO has been announced the launching of the latest model today on 23rd of January which is going to start the incorporation of debt levels of the consumers into the model of their scoring.

This has come as the total debt of the household in the United States has increased steadily for close to 2 years and is sitting currently at close to $13.95 trillion by the month of September in the year 2019, as per the Reserve Bank. This is higher than the higher previously $12.68 trillion having been seen only just before the financial crisis of 2008.

This had been bound to happen as per an expert known as John Ulzheimer on the credit scores and scoring and said that the job of the model of scoring is to assess the risks properly not simply giving the people better scores as the position of default.

FICO has estimated that close to 110 million consumers has been seeing a change of lesser than 20 points for the score of under the new model of credit score. Overall, the had roughly been 80 million consumers are seeing a change in the score of more than 20 points in either of the direction which is downward or upward as per FICO.

The ones who are falling behind on the payment of loans have been a lot more likely to see the drop in the score as per the media reports who are talking about the changes. The FICO is also planning to flag the consumers who are signing up for the personal loans.

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