If you have a credit card, a car payment, a mortgage, or buy insurance, your credit score - used to determine the cost of all those things - is about to change.
Our credit score is used to calculate all sorts of things, from how much insurance you'll pay on your car and home, to the interest rate you'll get on your mortgage and credit cards. Now the company that makes up that credit score is changing the way it's calculated - most likely to *your* benefit.
The Wall Street Journal says the new scoring system will give lenders a better idea who will default on a loan. That means if you occassionally slip up on a making a payment, you won't be penalized as harshly. Those who are repeat offenders will see their credit score drop.
You will get more points if you have a variety of credit types like credit cards, a mortgage and an auto loan. But - you will be penalized if you end up using a high percentage of your available credit. In other words - don't max out those credit cards.
Credit scores will still range from 300 to 850 -- the higher the score the better. Overall, the company says, more people will see their scores go up than go down.
