Credit scores govern many aspects of daily life in Florida. From who is eligible for an auto loan to what kind of apartment a person is approved for, the credit score is an important financial tool that is not always easy to improve or maintain. Because of this, some may be pleased to learn that FICO scores are being overhauled. Unfortunately, experts caution that it could lead to an increase in credit card debt and more.
UltraFICO will consider factors outside of those traditionally considered in credit histories. Unlike in the past, a person’s banking activities will also influence the score. Information like how long a person has maintained a bank account and their money management skills can now boost — or lower — a person’s score.
For consumers who manage their money effectively but have carried the burden of a poor credit score because of past actions, this new approach could help them gain access to lines of credit. However, this is not always a good thing. The current average for credit card interest rates is hovering around 17 percent, which can be difficult for even the most well-off person to handle. With an interest rate that high, carrying a balance from month-to-month can quickly spiral out of control. Growing interest rates may also be why current credit card balances sit at $6,375, which is a 3 percent increase from 2017.
Credit card debt may feel insurmountable, but it is generally dischargeable through bankruptcy. In Chapter 7 bankruptcy, debts are typically discharged in full, while in Chapter 13 this happens at the end of a repayment period. Those in Florida who are unsure of which approach may be best for them might want to consider seeking the guidance of an experienced attorney.