Secrets Behind the FICO Score

Your credit score is the secret number behind everything in your life. How much you pay for insurance, your car, rent and mortgage payments, utilities, and even whether you get a job or not, are ALL based on your FICO score.

As important as your FICO score is, do you really know how it works?

Well the good news is you are about to learn the hidden secrets behind your credit scores…

Payment History – 35%

Your payment history is the largest aspect of your FICO score accounting for 35% of your overall score.

This aspect of your total score calculation is based on your prior payment history with your creditors. Late payments, defaulted accounts, and all other NEGATIVE information on your credit report have the greatest effect.

The more paid-as-agreed accounts you have and the less negative accounts, the higher the credit score.

Percentage of High-Credit Used – 30%

The second largest factor in your credit score is the amount you owe on your individual accounts relative to your high credit limits on those accounts. This accounts for 30% of your total score.

You will be scored higher if you owe 30% or less of the high credit limit.

If you are carrying high credit card balances, you can actually hurt your credit scores almost as much as paying the account late every month.

Length of Credit History – 15%

Your “time in the bureau” accounts for 15% of your credit score. The longer you have had credit accounts for, the higher the score.

As you have more accounts throughout your life and your credit history grows over time, your FICO scores will naturally increase due to this factor.

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