Below is a pie chart that answers a very common question I receive.
I know the FICO scoring model no longer allows the use of authorized user accounts to boost credit scores. However, there are lots of credit boosting companies out there that promise rapid score improvement at low or minimal cost. I don’t agree with a lot of what they preach so I won’t link to them here. I take a very different approach. For a short term fix I suggest you study the chart carefully and determine methods of improving your score or, at least be headed in the right direction. If you have questions, I can help you with them, but I certainly don’t think a credit boosting company has all the answers either!
The true and tried method to improving your credit score over the long term is very simple. The first is to be vigilant for any potential errors on your report. I recommend using a free service such as annualcreditreport.com to review your report and score annually. You are legally entitled to a free report every twelve months. The second method is to pay all bills on time. I know this can be difficult sometimes but you need to make this a priority otherwise regardless of your income, your score will suffer.
Min. Credit Score Set at 620 for FHA, VA Loans
Auto Insurance and Your Credit Score
Related posts brought to you by Yet Another Related Posts Plugin.
on Jul 11th, 2007 at 10:15 pm
[...] penned an excellent post about What Makes up the FICO Score, complete with cool exploding pie [...]
on Jul 12th, 2007 at 7:50 am
Very nicely laid out.
Seeing things visually helps many people make better sense of once complicated ideas.
on Jul 12th, 2007 at 11:19 am
Thanks Joe.
I appreciate it.
Shailesh
on Aug 9th, 2007 at 1:11 pm
[...] or not there is confusion on the best methods to achieving this goal. So, if you feel like your 680 FICO score is too high and you’d like to lower it a few notches here is what you need to [...]
on Aug 16th, 2007 at 10:19 am
[...] that you should not close out unused or older credit card accounts. The reason for this is that there are a few things that make up a credit score and one of them is length of time an account has been opened. You can always make more money, pay [...]
on Aug 27th, 2007 at 6:07 am
[...] people are confused when it comes to their credit scores. I know I’ve posted a pie chart demonstrating what constitutes the FICO score, but there is so much more to the credit score. Take the quz below and find out how well you know [...]
on Sep 6th, 2007 at 7:53 am
Very nice pie graph. It’s a great way of illustrating the factors that make up a credit score. I’ve linked to it from my site.
on Sep 6th, 2007 at 7:59 am
[...] The Arizona Mortgage Guru put together a pie chart that nicely illustrates how these various factors make up a FICO score. As you can see, your payment history is the biggest determining factor of your credit score. Pay your bills on time, consistently, if you want to raise your credit score. [...]
on Sep 6th, 2007 at 8:51 am
Karyn,
Yes indeed. People like to see things.
Thanks,
Shailesh
on Oct 13th, 2007 at 2:57 pm
[...] having no credit is often times much better than having bad credit. Even though FHA is not a credit score driven loan program, if your score is below the 580 mark, well, lets just say things get really [...]
on Feb 6th, 2008 at 9:48 am
[...] credit profile and ability to obtain future financing is the last thing on your mind if you’re planning on [...]