Someone today asked me about FICO scores, and we had a great talk. I thought I’d reprint a post from the forums to help you all out. Toney posted the following, which has some great info.
The components of FICO are:
Payment History – 35%
Amounts Owed – 30%
Length of Credit History – 15%
New Credit – 10%
Types of Credit Used – 10%
What can affect your score?
1 – High outstanding debts – keep balances low on credit cards and other revolving credit.
2 – Late payments – note that paying off collction accounts will not remove them from your report. These accounts will stay on for seven years unless you get a letter of deletion from the collector.
3 – New accounts – If you’ve been managing credit for a short time, don’t open too many new accounts too rapidly