![]() Have you opened up a bunch of new credit cards recently (or tried to)? They really look into everything Here, credit bureaus are looking into your recent activity. ![]() ![]() Credit cards would fall into the revolving account category. Installment accounts include things like your mortgage, a car loan or personal loans. And usually, those fall into two categories: installment accounts and revolving accounts. The credit bureaus want to know what kinds of credit you’re juggling. This category factors in the average age of all of your credit accounts (including the newest and the oldest). If this gives you a head tilt, you’re in good company. But they also don’t like it when you’re not using enough. Turns out, creditors don’t want you borrowing up to your credit limit (at least we have that in common). Have you missed payments? Are you in good standing with your creditors? Have you filed for bankruptcy?Īmounts owed (or credit usage) just looks at the percentage of debt you have in comparison to your credit limit. They take a detailed look at how you’ve handled your debt over the years. Your payment history is exactly as it sounds. This makes up the biggest chunk of your credit score, coming in at a whopping 35%. But here are the factors we do know they use to figure out your credit score: 1 In other words, no one outside the company really knows exactly how they calculate the scores. The folks at FICO love to keep their cards close to the chest on this one. All it really says is how good you’ve been at making payments to banks and lenders over and over again. In reality, a FICO score doesn’t measure how good you are with money, how wealthy you are, or how successful you are. In reality, the FICO score didn’t even become a thing until 1989-and that means it could be younger than you! Kind of makes you think twice about how much people rely on this thing, doesn’t it? But that’s just what the powers that be at FICO want you to think. In today’s world, most people probably think the FICO score is as old as time itself. Founded back in 1956 by Bill Fair and Earl Isaac, FICO has become a powerhouse of credit reporting over the years. So, who do we have to thank for the “almighty” FICO score? That would be the company that used to be called the Fair Isaac Corporation. The higher your score, the more “trustworthy” you are in the lender’s eyes. Lenders use this credit scoring system to decide if they can count on you to pay back your debts. Your FICO score is a kind of credit score that’s used to figure out if you’ll be approved to borrow money. And it’s time to start thinking about it in a whole new light.īut what is a FICO score anyway? What is this thing you’ve allowed to rule your life? And when did everyone start using it as the ultimate measure of how successful you are? It’s time to break down everything you need to know about the FICO score-and why you don’t really need one. That’s right-we’re talking about your credit score. You live and breathe those three life-altering digits. You’ve had it for so long, it’s almost like a buddy. You’ve been playing the game for years now.
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