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Here's what you need to know about the new FICO scoring system

This could mean a big change to your score depending on what kind of debt you carry.

ST. PETERSBURG, Fla. — Knowing your credit score is one of the first steps in taking control of your finances. But for some Americans, that credit score could see a change soon.

That’s because Fair Isaac Corp., the company that created FICO scores (which determine consumer’s credit ratings), is changing the formula for how it adjusts FICO scores.

According to FICO’s Vice President of product management and scores, most consumers will see only a small change in their scores (less than 20 points up or down). Others, however, could see a sharp increase or decrease in their scores depending upon the type of debt they carry and how they manage that debt.

Under the new model, consumers may see bigger penalties if they are using personal loans to consolidate credit card debt while simultaneously increasing the debt owed on those credit cards. Missed payments will also penalize consumers, as will recent trends of increasing debt and credit usage.

So, what can you do to get ahead of the changes?

First: Know your credit score. You can request a copy of your credit report from each credit reporting bureau for free once per year.

Second: Dispute any inaccurate claims on your credit report, which will change the status of those claims and help increase your score while they are in dispute.

Third: Make all payments on time because late payments will hurt your score.

RELATED: 17 credit score myths debunked

RELATED: ‘This is how I improved my credit score’: Consumers share their tips

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