How FICO Scores You
Today I thought I would talk about how FICO actually scores you so that you would have some idea what you do to your credit and how it affects the score. I thought that was kind of interesting to find out how they actually manage those scores.
So, 35% of your score is on your payment history. That’s why it’s so important for you to pay your bill on time. Don’t ever let it go more than 30 days. Even if all you are doing is paying $20, pay the $20 so that you don’t go over that 30 day limit or that 30 day period, because once it goes late it’s really hard to make your score go up. Because it’s such a heavy scoring amount. 35% is a lot for payment history.
30% is on the amount that you owe and that means that if they give you a credit card of $1,000 and you put $900 on that account, that’s almost the whole amount. So your score is going to be lowered a little bit because you are so close, It will get really scored high if you go over that $1000 limit. Don’t push your credit amount up over what actually they are giving you because that really damages your credit. 30% so be careful with that.
15% is based on the length and history of your credit. So if you’ve just opened up an account 15% of that FICO score is based on your history. If you’ve got 30 years of history, well it’s only 15% that they’re going to look at for how they calculate your FICO score.
10% is based on new inquiries. So, if you want to go out and buy a car and you have your trw run a couple of times what they are doing is they are checking your credit and every time they do it’s about 10% of your credit score that is damaged.
And of course the type of credit. It’s another 10%. A mortgage account, a bill that you pay to pay a house payment is calculated at 10% and so is a credit card. So, you’ve got to be careful with the kind of credit that you get. If you have 5 credit cards out of department stores, that’s 50%, that’s a lot.
So 35 on the credit history or the payment history, 30% on the amount you owe, 15% on the credit history – the length of time that you’ve had that credit, 10% on new inquiries, and 10% on the type of credit that you’ve taken on.
I hope that helps a little bit with how they score FICO and if you have any questions or you would like to ask me anything else, if you are thinking about buying or selling a house, give me a call. I’d be glad to help.
Mary Ann Edwards Re/Max College Park
Lic # 01103542