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Home > Tools & Education > Fico Score
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Understanding the Crossroads that Lead to Explaining the Score
What makes up the score?
- 35% = Payment history (on-time pays vs. delinquencies)
More weight on current pay history
- 30% = Capacity
- 15% = Length of credit
- 10% = Accumulation of debt in the last 12-18 months
- Number of inquiries
- Opening dates
- 10% = Mix of credit
- Installment (raises) vs. revolving (lowers)
- Number of finance company loans (the more, the lower the score)
What actions hurt the score?
- Missing payments (regardless of the $ amount, it will take 24 months
to restore credit with one late payment)
- Credit cards at capacity (i.e. maxing out credit cards)
- Closing credit cards (this lowers available capacity)
- Shopping for credit excessively
- Opening up numerous trades in a short period of time
- Having more revolving loans than installment loans
- Borrowing from finance companies
What doesn’t affect the score?
- Debt ratio
- Income
- Length of residence
- Length of employment
Approximate credit weight for each year
- 40% = Current to 12 months
- 30% = 13-24 months
- 20% = 25-36 months
- 10% = 37+ months
How to improve the score
- Pay down credit cards
- Do not close credit cards because capacity will decrease
- Continue to make payments on time (older late pays become less significant over time)
- Slow down on opening new accounts
- Acquire a solid credit history with years of experience
- Moving revolving debt to installment debt
How to Check Your Credit
- You are entitled to receive one free credit report every 12 months from each of the nationwide consumer credit reporting companies – Equifax, Experian and TransUnion. This free credit report can be requested through the following
website:
- Contact each of the nationwide consumer credit reporting companies here:
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