The letter will, possibly, be a joke. Equifax list 3 reasons why your score is what it is. The last one I had said my cc balances were too high....$40 on a $20K line..
TD bank will show me my score and "what if" scenarios. 1 30 day late cost me 100 points. 1 account going to collections cost me 200 points. This is with 30 years of perfect history. Things like medical collections hurt a lot too.
fico score
Payment History – 35%
As you might expect, the repayment of past debt is a major factor in the calculation of credit scores. It helps determine future long-term payment behavior. Both revolving credit (i.e. credit cards) and installment loans (i.e. mortgage) are included in payment history calculations. Although installment loans take a bit more precedence over revolving credit. That’s why one of the best ways to improve or maintain a good score is to make consistent, on-time payments.
Amounts Owed – 30%
This category is basically credit utilization or the percentage of available credit being used/borrowed. Credit score formulas “see” borrowers who constantly reach or exceed their credit limit as a potential risk. That is why it’s a good idea to keep low credit card balances and not overextend your credit utilization ratio.
Length of Credit History – 15%
This factor is based on the length of time all credit accounts have been open. It also includes the timeframe since an account’s most recent transaction. Newer credit users could have a more difficult time achieving a high score than those who have a credit history. Since those with a longer credit history have more data on which to base their payment history.
Credit Mix – 10%
FICO® Scores consider the combination of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Credit mix is not a crucial factor in determining your FICO Score unless there’s very little other information from which to base a score.
New Credit – 10%
Today’s higher use of credit factors into FICO® Score calculations. Still, opening several new credit accounts in a short period of time can signify greater risk – especially for borrowers with a short credit history. So how one shops for credit and within what timeframe can affect a FICO Score in a number of ways.
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