How exactly is FICO score calculated, and what exact steps can raise it?
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BrunoPuntzJones
Lifer
- Feb 24, 2001
- 14,513
- 4
- 81
cant give you any exact stuff 
i know that there are 5 catergories they look at though:
Payment history
Balances
Credit history
Types of credit
Sources of credit
many are the same (payment history, credit history, types, and sources) as those used to evaluate giving businesses credit accounts. not that that answered your question
i know that there are 5 catergories they look at though:
Payment history
Balances
Credit history
Types of credit
Sources of credit
many are the same (payment history, credit history, types, and sources) as those used to evaluate giving businesses credit accounts. not that that answered your question
RossMAN
Grand Nagus
- Feb 24, 2000
- 78,814
- 319
- 136
Sorry I don't have the magical formula, other than
Pay bills on time + LOTS OF PATIENCE = Good FICO score.
Here's some stuff I found on Google:
FICO FAQ:
What is a FICO Score?
FICO scores are numeric representations of your credit profile. The higher the FICO score the better credit risk you are.
FICO is a product of Fair, Isaac Company. These have been around for several years but started to be used in the mortgage lending business in 1995 for the purpose of keeping down the expense associated with Home Equity loans. You needed a certain minimum score to get such a loan.
FMLMC and FNMA both insist on a FICO score on your credit report. Presumably, you can be denied a mortgage loan if your score is too low. People will be unhappy as a result and our elected officials will find a new cause to protect us from.
We can say the following about these scores:
they are based on years of computer modeling aimed at predicting who might be a credit risk.
their purpose is to reduce the cost of examining a credit report and speed mortgage approvals.
when your FICO is computed the program tells the credit bureau what the 4 most important factors were in determining the score.
Fair, Isaac and the credit bureaus do not want to reveal how these scores are computed. The Federal Trade Commission has ruled this to be OK.
The important negative factors are: bankruptcies, delinquencies, credit lates, collections, too many "tapped out" credit lines, "too much" credit, too little credit history.
the score is only as good as the data. The amount of credit data history is so large that there are problems with it. The most common problem that I see is with relatives with the same name who live at the same address (father and son).
Borrowers often dispute the data but it is very accurate.
It is more important that ever to keep a good or perfect credit history.
Even the very act of getting a credit inquiry is said to lower the FICO score (very slightly) so it is important to not authorize someone to obtain your credit report unless it is necessary.
FICO Credit Bureau Risk Score (very interesting chart)
Click here to see more Google matches.
Pay bills on time + LOTS OF PATIENCE = Good FICO score.
Here's some stuff I found on Google:
FICO FAQ:
What is a FICO Score?
FICO scores are numeric representations of your credit profile. The higher the FICO score the better credit risk you are.
FICO is a product of Fair, Isaac Company. These have been around for several years but started to be used in the mortgage lending business in 1995 for the purpose of keeping down the expense associated with Home Equity loans. You needed a certain minimum score to get such a loan.
FMLMC and FNMA both insist on a FICO score on your credit report. Presumably, you can be denied a mortgage loan if your score is too low. People will be unhappy as a result and our elected officials will find a new cause to protect us from.
We can say the following about these scores:
they are based on years of computer modeling aimed at predicting who might be a credit risk.
their purpose is to reduce the cost of examining a credit report and speed mortgage approvals.
when your FICO is computed the program tells the credit bureau what the 4 most important factors were in determining the score.
Fair, Isaac and the credit bureaus do not want to reveal how these scores are computed. The Federal Trade Commission has ruled this to be OK.
The important negative factors are: bankruptcies, delinquencies, credit lates, collections, too many "tapped out" credit lines, "too much" credit, too little credit history.
the score is only as good as the data. The amount of credit data history is so large that there are problems with it. The most common problem that I see is with relatives with the same name who live at the same address (father and son).
Borrowers often dispute the data but it is very accurate.
It is more important that ever to keep a good or perfect credit history.
Even the very act of getting a credit inquiry is said to lower the FICO score (very slightly) so it is important to not authorize someone to obtain your credit report unless it is necessary.
FICO Credit Bureau Risk Score (very interesting chart)
Click here to see more Google matches.
TuffGirl
Platinum Member
- Jan 20, 2001
- 2,797
- 1
- 91
I don't have a formula either.
I pay my bills on time too but I used to have a lot of accounts that I opened up at stores, cc promotions, etc. All of them with barely used and with zero balances. Then I had a friend of mine (a business major) once tell me that just having all those accounts is detrimental to my FICO, so I closed a bunch of them.
I'm wondering, is there any truth to that? Can anyone else confirm this?
I pay my bills on time too but I used to have a lot of accounts that I opened up at stores, cc promotions, etc. All of them with barely used and with zero balances. Then I had a friend of mine (a business major) once tell me that just having all those accounts is detrimental to my FICO, so I closed a bunch of them.
I'm wondering, is there any truth to that? Can anyone else confirm this?
RossMAN
Grand Nagus
- Feb 24, 2000
- 78,814
- 319
- 136
I don't have a formula either.
I pay my bills on time too but I used to have a lot of accounts that I opened up at stores, cc promotions, etc. All of them with barely used and with zero balances. Then I had a friend of mine (a business major) once tell me that just having all those accounts is detrimental to my FICO, so I closed a bunch of them.
I'm wondering, is there any truth to that? Can anyone else confirm this?
Yes this is true.
I pay my bills on time too but I used to have a lot of accounts that I opened up at stores, cc promotions, etc. All of them with barely used and with zero balances. Then I had a friend of mine (a business major) once tell me that just having all those accounts is detrimental to my FICO, so I closed a bunch of them.
I'm wondering, is there any truth to that? Can anyone else confirm this?
Yes this is true.
Yes, to much "open credit" is not good. It shows you have the potential to rack up a large debt in a short time. Close some of your accts. and/or get the max limits lowered.
P.S ! My advice to you is to get a copy of your credit reports from all 3 major reporting agencies. There was a recent court judgement that says that if you don't dispute a mistake on your credit report within 2 yrs of the time the mistake was made it is stuck on there for 7 to 10 yrs. This is not fair but its the way it is going to be. The burden of credit report accuracy lies with the consumer.
P.S ! My advice to you is to get a copy of your credit reports from all 3 major reporting agencies. There was a recent court judgement that says that if you don't dispute a mistake on your credit report within 2 yrs of the time the mistake was made it is stuck on there for 7 to 10 yrs. This is not fair but its the way it is going to be. The burden of credit report accuracy lies with the consumer.
TuffGirl
Platinum Member
- Jan 20, 2001
- 2,797
- 1
- 91
<< Yes this is true. >>
<<Yes, to much "open credit" is not good. It shows you have the potential to rack up a large debt in a short time. Close some of your accts. and/or get the max limits lowered. >>
Hey thanks for verifying that! Now I'm glad I closed all those accts.
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