FICO Score?

“Last week you answered a question about FICO scores. But what actually makes up a FICO score?”

***ANSWER:
Here’s what goes into your FICO, with some comments and tips:

35% – Payment history
How current you are with your monthly bills. So pay everything ON TIME.

30% – Amount of debt
It’s best to never exceed 30% of your available credit card limit and to pay it down to a zero balance each month.

15% – Length of credit history
The longer your revolving accounts (credit cards) have been open and active, the better your score.
Don’t close credit cards with a 2+ year history or you’ll lose all the good history you’ve built. Keep them open and charge $5 every 3-5 months to keep them active. (Credit cards go “inactive” after 6 months, lowering your score.)
To quickly add good credit history, ask a friend or relative to add you as an “authorized user” (NOT “joint user”) on 3-5 credit cards they’ve had 5+ years. You MUST make at least one charge of $5+ on your new card to get their positive history on your credit. After that, cut the cards up.

10% – New credit
Opening any new account (even cell or cable!) lowers your score for 6-12 months. And new inquiries lower your score 5-22 points for 90 days.

10% – Types of credit
Having both credit cards and installment loans (and making payments on time!) raise your score. But don’t open accounts just for a better credit mix – it likely won’t raise your score for a while.

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