If you've ever borrowed money from a bank, a mortgage lender or a car financing company, you're no doubt familiar with the term "credit score."

FAIR ISAAC, the company that created the widely-used FICO score, can make or break your ability to borrow money at a competitive rate, or, for that matter, borrow at all!

The way that FAIR ISAAC calculates credit scores is being updated this year. The new model is called FICO 08, and it could be good news for many borrowers!

The new system is going to be more forgiving of occasional credit slip-ups (forget to pay your bill?) and young credit files - but it will be less forgiving for repeat offenders.

The roll-out of this new scoring model is scheduled for this spring. The scoring stays the same (from 350 to 850), and FICO will continue to include your level of indebtedness, length of credit history, number of inquiries, etc., but it will use a finer calculation to separate the good and bad risks.

We like it. Banks and borrowers should both win.

We'll have much more details about FICO 08 soon here on Dolans.com. In the meantime, here is more information on this important subject:

• Everything You Need to Know about Your Credit Rating
• 5 Ways to Correct Errors on Your Credit Report
• Clean Up Your Credit Rating