What you need to know about FICO® Score 9

Happy father and children laughing together on a sofa Image: Happy father and children laughing together on a sofa

In a Nutshell

FICO® Score 9 looks at medical debt, paid collections and rental history differently than previous versions of the FICO® credit-scoring models. Here’s why your FICO® Score 9 credit scores could be different.

Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted. Availability of products, features and discounts may vary by state or territory. Read our Editorial Guidelines to learn more about our team.
Advertiser Disclosure

We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

The latest version of the FICO® credit-scoring model, FICO® Score 9, has three major changes that could affect your FICO® Score 9 credit scores.

Medical debt, paid collections and rental history are all new considerations when consumers’ credit scores are calculated with FICO® Score 9.


FICO® scores

In 1958, Fair Isaac Corporation created a mathematical formula designed to analyze consumer credit risk based on a number of factors. Today, those factors generally include payment history, credit usage, length of credit history, credit types and recent credit inquiries — each carrying a different weight when considered in the formula.

The formula results in a three-digit number — ranging from 300 to 850 — that is known as a base FICO® credit score. There are three major consumer credit bureaus: Equifax, Experian and TransUnion. Consumers will probably see variations in their FICO® credit scores among bureaus. Your FICO® scores are based on your credit report from each bureau. And each bureau may collect slightly different information, which could lead to differences in how your FICO® scores are calculated.

According to a May 2015 CEB TowerGroup analyst report, FICO® scores were used in more than 90% of lending decisions in the U.S., indicating that it’s one of the most widely known credit scores.

Comparable credit-scoring models commonly used by credit bureaus are from VantageScore Solutions, whose latest version is VantageScore® 4.0. Although differing credit-scoring models can produce slightly different credit scores, they generally use similar factors.

FICO® credit-scoring models have undergone numerous revisions over the past three decades. With trends of consumers and needs of lenders continually evolving, FICO has adapted its models to keep up. For you, that means you might have several FICO® scores based on different models.

So what exactly is different about the FICO® Score 9 scoring model?

First major change: Medical collections

In 2014, the Consumer Financial Protection Bureau reported that medical debt had a significant and negative impact on consumer credit.

The CFPB reported that 43 million Americans had overdue medical debt on their credit reports. This number raised concerns that the system put in place to collect and report the debt to the credit bureaus was causing an even-steeper uphill battle for consumers. The CFPB pointed out that consumers may become responsible for medical debt due to billing issues between their medical provider and their insurance provider, meaning consumers may not know they have medical debt until they get a call from collections. So not only did consumers have to deal with the bothersome phone calls of collections agencies, but they also had to be concerned about their credit scores being negatively affected.

Unpaid medical bills in collections have less negative impact on FICO® Score 9 credit scores than with previous FICO® scoring models. Also, unpaid medical bills sent to collections agencies will have less impact on FICO® Score 9 credit scores than nonmedical debt.

But it’s important to note that FICO® Score 9 doesn’t erase a consumer’s medical debt or fix a confusing medical billing system. This new scoring-model version just gives medical debt less weight when it comes to calculating credit scores with this version.

Second major change: Paid collections

Previously, even paid debts — medical and nonmedical — sent to a collections agency reflected poorly on a consumer’s FICO® credit scores. Now, outstanding bills sent to collections and subsequently paid in full by the consumer will not negatively impact FICO® Score 9 credit scores.

This change can benefit consumers in two ways. First, it gives consumers a chance to raise their FICO® Score 9 credit scores despite having debts from unplanned medical or other financial emergencies on their record. And, second, it works as an incentive for consumers to pay off their outstanding debts, as paying off a debt in full that had been in collections can have a positive impact on their scores.

Third major change: Rental history can be included

With FICO® Score 9, rental history is now factored into these credit scores when landlords directly report the payments to one or all of the credit bureaus. Before this newest version, rental history was simply not factored into your FICO® credit scores. This change may be most beneficial to consumers who have just started to establish their credit history. A forewarning regarding this change: Landlords aren’t required to report their tenants’ payment history to the credit bureaus. If this change could be beneficial to you, consider asking your landlord if they plan to report your payments to the credit bureaus before signing that rental agreement.

Will you see a change in your FICO® Score 9 credit scores?

Even though FICO® Score 9 was officially launched to lenders in 2014, most lenders still use FICO® Score 8. Lenders get to decide on which version they use in their lending decisions, and FICO® Score 9 is only gradually being adopted. Over time, consumers might see slight differences in their FICO® Score 9 credit scores.

How to find your FICO® Score 9 credit scores

The answer may be sitting right in your wallet. In 2014, the Consumer Financial Protection Bureau supported a push for consumers to be able to easily access their credit scores for free from credit card companies, in the hope of making the once-mysterious number more easily available and useful to the consumer.

Today, some credit issuers offer programs that allow members to check their FICO® scores for free. Check with your bank or credit card company to see if it offers this perk. Keep in mind that even if your bank or card does offer free FICO® scores, it may not be the FICO® Score 9.

Consumers can also go to myfico.com and use the free FICO® scores estimator to get projected FICO® scores or pay a fee to obtain their actual FICO® scores.


Bottom line

FICO® Score 9 introduced three major changes to how FICO® credit scores are calculated. Medical debt can have less of a negative effect, collections debt doesn’t have the same negative impact once fully paid, and rental payments — if reported by landlords — are also considered.

Whichever credit-scoring model is used to calculate your unique credit scores, remember that credit scores fluctuate and should be regularly monitored. Whether you are happy with your current credit scores or wish they were a little higher, remember these rules of thumb: Make at least minimum payments on time, keep credit card balances low or paid off, and only open new credit cards when needed.


About the author: Sarah Schaut is a Canadian living in sunny Florida. She’s an economic crimes detective at a city police department and an expert in credit, fraud and mortgages. Read more.