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FICO Credit Score - Where Does It Come From? - Friday, July 09, 2010
FICO Credit Score - Where Does It Come From?
         
 
  FICO Credit Score Components

35% Payment History
30% Amounts Owed
15% Length of Credit
10% New Credit
10% Type of Credit
 
 
       
    If you’re trying to improve your FICO credit
score, you may need to focus on one or
more of the components above.
 
       
         
 

Improve Credit Scores Step-by-Step

Improve Credit Scores - Payment History Category

· Pay on time, no magic secret here

· If you can’t pay on time, notify your lender that you need to work something out

· Get current on past due accounts

Improve Credit Scores - Amounts Owed Category

· Keep low balances relative to your credit limit - 35% or lower is best.

· Don’t open new accounts just to lower your used credit capacity - having too much capacity is a risk too

Improve Credit Scores - Length of Credit Category

· Consider keeping old accounts open if you’ve been a good borrower

· Start building credit as soon as possible

Improve Credit Scores - New Credit Category

· When shopping for new credit, keep it all within a short time frame such as 14 days or less

· Borrowers with a bad history can improve credit scores by opening a new account and managing it responsibly

Improve Credit Scores - Types of Credit Category

· Installment debt (where you pay fixed monthly installments to eliminate the debt) is “better” than revolving debt (open-ended credit card debt)

· Certain finance company debts (like buying a product with retailer financing) can lower your score

In general, you need to know that it takes time and discipline to improve credit scores.

Start to Repair Your Credit Today. Read More ...

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