Improving your FICO® credit score

Payment History Tips

Pay your bills on time.

Delinquent payments and collections can have a major negative impact on your FICO score.

Amounts Owed Tips

• Keep balances low on credit cards and other “revolving credit”.
• High outstanding debt can affect a score.
• Don’t close unused credit cards as a short-term strategy to raise your score.
• Don’t open a number of new credit cards that you don’t need, just to increase
• your available credit.
• This approach could backfire and actually lower score.

Length of Credit History Tips

If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly

New accounts will lower your average account age, which will have a larger effect on your score if you don’t have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

New Credit Tips

Note that it’s OK to request and check your own credit report. This won’t affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.

Types of Credit Use Tips

Have credit cards - but manage them responsibly.

In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.

Note that closing an account doesn’t make it go away.

A closed account will still show up on your credit report, and may be considered by the score.

 What’s in your FICO® Score?

Payment History - 35%

• Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
• Presence of adverse public records (bankruptcy, judgments, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)
• Severity of delinquency (how long past due)
• Amount past due on delinquent accounts or collection items
• Time since (recency of) past due items (delinquency), adverse public records if any), or collection items (if any)
• Number of past due items on file
• Number of accounts paid as agreed

Amounts Owed - 30%

• Amount owing on accounts
• Amount owing on specific types of accounts
• Lack of a specific type of balance, in some cases
• Number of accounts with balances
• Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts) Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)

Length of Credit History - 15%

• Time since accounts opened
• Time since accounts opened, by specific type of account
• Time since account activity

New Credit - 10%

• Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
• Number of recent credit inquiries
• Time since recent account opening(s), by type of account
• Time since credit inquiry(s)
• Re-establishment of positive credit history following past payment problems

Types of Credit Used - 10%

Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)

Please Note that:

• A FICO score takes into consideration all these categories of information, not
• just one or two.
• No one piece of information or factor alone will determine your score.
• The importance of any factor depends on the overall information in your credit report.
• For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your FICO score. Thus, it’s impossible to say exactly how important any single factor is in determining your score - even the levels of importance shown here are for the general population, and will be different for different credit profiles. What’s important is the mix of information, which varies from person to person, and for any one person over time.
• Your FICO score only looks at information in your credit report.
• However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting.
• Your score considers both positive and negative information in your credit report.
• Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will raise your FICO credit score.

*This information has been prepared by DataFacts and is based on information provided by Fair Isaac Corporation, and is used with permission. Copyright © Fair Isaac Corporation. All rights reserved. Further use, reproduction, or distribution is governed by the FICO Copyright Usage Requirements, which can be found at www.fico.com.