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Bad news: The new FICO score changes could impact the credit cards you qualify for
The FICO 10 scoring model is slated for a summer release and could cause your credit score to drop 20 points as the model looks at past debt and balances.

If you've been carrying credit card debt, you could see a drop in your credit score soon.

Fair Isaac Corp., the creator of the FICO score, announced today, Jan. 23, the new FICO 10 model, which is expected to cause scores to fluctuate roughly 20 points. This change comes on the heels of the average FICO score hitting a record high of 703 earlier this month.

The new credit scoring model will be calculated to incorporate consumers' account balances for the previous 24-plus months, which is bad news for anyone carrying balances month to month. These changes are expected to widen the gap between people with good credit (scores 670 to 739) and those with bad credit (scores below 580).

"Those consumers with recent delinquency or high utilization are likely going to see a downward shift, and depending on the severity and recency of the delinquency it could be significant," Dave Shellenberger, FICO VP of product management, says.

FICO estimates that roughly 110 million consumers will see a change to their credit score once the new model is in effect later this summer. Approximately 40 million consumers will see a shift upward over 20 points and another 40 million will see a shift downward.

"This isn't consumer unfriendly," John Ulzheimer, an expert on credit scores and credit scoring, tells CNBC Select. "People with good credit are going to score higher with newer models. People who have elevated risk are going to score lower. That's always what you see in a newly developed model when you compare score distributions to older models."

A good credit score is key to qualifying for competitive rewards cards, like the American Express® Gold Card or the Chase Sapphire Reserve®, that make it worthwhile to have a score above 670.

Take action: Check your credit score for free

CNBC Select offers some tips on how increase your credit score and achieve good credit in anticipation of the new FICO 10 scoring model.

How to improve your credit score

Make on time payments

Payment history is the most important factor of your credit score, so it's key to always pay on time. Set up autopay or reminders to ensure timely payments.

Pay your bill in full

While you should always make at least your minimum payment, we recommend paying your bill in full every month to reduce your utilization rate (your total credit card balance divided by your total available credit). In general, the lower your utilization, the better your credit score.

Don't open too many accounts at once

Each time you apply for credit, whether it's a credit card or loan, and regardless if you're denied or approved, an inquiry appears on your credit report. This temporarily dings your credit score about five points, though it'll bounce back within a few months. Try to limit applications as needed and shop around with prequalification tools that don't hurt your credit score.

Complete a balance transfer

If you're in debt, consider a balance transfer credit card that offers up to 21 months of interest-free financing, such as the Citi Simplicity® Card (after 16.24% to 26.24% variable APR). If you put together a clear payment plan before you make the transfer, you can pay off the balance quicker and cheaper than leaving the debt on a high interest credit card. Your payments will go fully toward your debt versus debt plus interest.

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