Your FICO credit score
WHAT MAKES UP YOUR FICO SCORE
- Payment History: 35% ALWAYS PAY ACCOUNTS ON TIME!!!
· Number of accounts paid as agreed
· Negative public records or collections
· Delinquent accounts:
· 1. Total Number of Past Due Items 2. How Long the Account has Been Past Due 3. How Long it has been since there was a past due payment
Below is a chart depicting the weight assigned to each year of an individual’s payment history:
|
Timeframe
|
Approximate Weight Assigned to Year
|
|
Most recent 12 months
|
40%
|
|
Prior 12 to 24 months
|
30%
|
|
Prior 24 to 36 months
|
20%
|
|
Prior 36 to 48 months
|
10%
|
|
Older than 4 years
|
0%
|
2. Capacity (Amount You Owe): 30% KEEP CREDIT BALANCES BELOW 30% OF LIMIT!!
The FICO model considers three separate components of an individual's credit when assigning capacity points:
· Installment balances compared to the original loan amounts.
· Revolving account balance compared to an individual's revolving credit limit on an account-by-account basis; and
· Total revolving account balances compared to an individual's total revolving limits.
3. Length of Credit History: 15% DON’T CLOSE OLD CREDIT CARDS!
Lenders are looking for borrowers with long credit histories. Also, consumers with new credit should be cautious about opening many accounts. Rapid account buildup may look risky because of uncertainty in handling the credit .
4. Types of Credit: 10%
· Total number of accounts and types of accounts (installment, revolving, mortgage, etc.)
· A mixture of account types usually generates better scores than reports with only numerous revolving accounts (credit cards)
5. New Credit: 10% MUTIPLE MORTGAGE INQUIRIES ARE TREATED AS ONE WITHIN A 14 DAY PERIOD OF TIME!
Approximately 10% of your credit score is based on how many recent new accounts you have established. This factor reviews:
· Number of accounts
· Length of accounts
· Recent requests for credit report
· Length of time since credit report inquiries were made by potential lenders
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Lee Bryant
Coldwell Banker Sea Coast Realty
1001 Military Cutoff Rd Suite 101
Wilmington
NC
28405
© 2003 – 2010 Real Pro Systems, LLC
Last modified 7/30/2010