Remember when Microsoft's Windows '95 was getting all the press? Since then there have been a multitude of newer and better versions of the operating system, and right now Microsoft is promoting Windows 7. FICO is nothing more than a software algorithm that crawls through the data on your credit report; much the same way as Google will crawl through web sites looking for content. The purpose of the FICO software is to try and predict your chances of defaulting on future debt obligations within the next 2 to 3 years. So how many versions of FICO are out there?
At least three that we know of. Until recently, the mortgage industry was able to use a version written back in 1998. This was only available for the data contained in a Trans Union report, but nevertheless, there were instances when the 1998 version gave you a higher Trans Union FICO score, and those 5 to 10 points were sometimes the difference in getting a loan.
Most banks using FICO are using the version created in 2004, which is commonly referred to as FICO Classic. The Fair Isaac Company is aggressively promoting the newest version of FICO which has been dubbed FICO '08.
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