www.care4yourfuture.org has created a list of the elements that make up your FICO score. For other information visit “care4yourfuture”
Understanding the Crossroads that Lead to Explaining the Score
What makes up the FICO score?
35°/o = Payment History
30°/o = Capacity (Capacity is King)
15°/o = Length of Credit
10°/o = Search & Acquisition for
New Credit
10°/o = Type of Credit
What actions wi ll hurt the score?
Missing payments (regardless of
$ amounts…It will take 24mo to restore credit with one late pay).
Credit cards at capacity (i.e. maxing out credit cards).
Closing credit cards out (this lowers available capacity)
Opening up numerous trades in a short time period.
Having more revolving loans in relation to installment loans.
Loans at finance companies.
What does not Af fect the Score
Income
Length of residence
Length of employment
Approximate Credit Weight for each Year
40°/o = current to 12 months
• 30°/o = 13-24 months
• 20°/o = 25- 36 months
• 10°/o = 37+ months
How to Improve the Score
Pay down on credit cards.
Do not close credit cards. because capacity will decrease
Continue to make payments on time (old late pays will become less significant with time).
Slow down getting new loans.
Acquire a solid credit history with years of experience.
Move revolving debt to installment debt.