FICO Tips: Brief Synopsis
- FICO scores have many component parts.
- You must first understand the FICO model.
- Getting and maintaining additional credit cards can help your FICO score.
FICO Tips: Full Explanation
There are many places out there who will try to sell you a ‘credit score’. However, the most important, and widely used, score is the FICO score. This is the one you should concentrate your time on improving. That being said, the FICO score is a complicated concoction, and it takes time and effort to improve your FICO score. Removing derrogetoryy items, such as late payments or foreclosures, will drastically improve your FICO score. However, these fixes take time and know-how.
There are, however, easy tips and tricks that you can use to make incremental boosts to your FICO score. There are many sections of the FICO score model, which take different factors into account when creating a score. Familiarizing yourself with the components of the FICO score is step one. This will allow you to see what areas could be bringing down your score, and what you can do to build healthy credit and a higher FICO score.
The number one thing you can do to improve your FICO score yourself is to manipulate your revolving accounts. Under the FICO model, the ideal person should have 3-5 revolving accounts. If you don’t have 3-5 revolving accounts visit out rebuilding credit tab and go apply for some! Sometimes, it may be hard to get a credit card if your credit is already poor. In this case, check out our credit building page for more ideas, such as a secured credit card.
Once you have more credit lines, you have to be careful about managing them. Make sure to keep your revolving balances under 30% of the credit limit. The latest version of the FICO software is heavily weighing the aggregate total of your revolving accounts but since most places have not implemented the latest software, I still recommend keeping your balances below 30% on each of your revolving accounts. The higher your balances the more points will be subtracted from your score. In addition, try to have balances on no more than four of your revolving accounts.