What Makes up a FICO Credit Score?

What Makes up a FICO Credit Score?

On our Credit Restoration page we outlined the categories used to derive a credit score.  To review, those categories are the following… Payment History – 35% Amount Owed – 30% History of Credit – 15% Inquiries – 10% Account Diversity – 10% Today we are going to take a deeper look inside each of these categories including a few credit building tips that will show you how to improve your credit score for FREE!  As always, if you are looking for assistance on how to repair your credit quickly, effectively and at a low cost, be sure to contact us. Payment History These factors make up 35% of the FICO score. Payment info on specific types of accounts (credit cards, installment loans, mortgage, etc.) Negative public records (bankruptcy, suits, liens, judgments, wage garnishments etc.) Collection items, and/or past due items Severity of delinquency (how long past due) $ past due on delinquent or collection accounts Recency of delinquency, public records and collection items. # of past due items on file Number of accounts paid as agreed   Amount Owed Debt amount makes up 30% of the score, and also impacts the debt-to-income (DTI) ratio another tool lenders use when qualifying a loan application. $ owed on accounts (including specific types) # of accounts with balances Lack of a specific type of balance, in some cases Credit Utilization Rate (CUR) – The percentage represented by the amount owed on an account divided by the credit limit of the same account.  This also applies at the aggregate level for all revolving lines of credit for a consumer.   Length of Credit History This is the part of your credit profile that you have no physical control over.  The sooner you establish good credit practices the better. How long accounts have been opened How long accounts have been opened (measured by specific type of account) Time since last account activity     Inquiries & New Credit Only 10% but the easiest to control Number of recent credit inquiries (all credit pulls within 30 days count as 1 – for rate shopping) Time since last credit inquiry (month-to-month) # of recently opened accounts (by amount & type) Time since recent account opening(s), (by type) Re-establishment of positive credit history following past payment problems     Account Diversity Account mix makes up 10% of the FICO score and acts as a mechanism to help prevent the manipulation of scores. myFico.com defines Account Diversity as… “Number...

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