Wednesday, May 24, 2006

The Makings of a FICO Score

Even with all of my debt, my FICO score is 711 and that is considered a good score. According to some literature, I should be able to get a loan with no problem but as soon as lenders see my debt to income ratio (52% - the desirable is less than 15%) I think they head for the hills.

How could it be that my score is so high given all of my credit card debt and other debt?

It all boils down to how the FICO score is calculated (as found at

35% - payment history
30% - amounts owed
15% - length of credit history
10% - new credit
10% - types of credit in use

One thing that has always been a top priority is to try to make sure all payments to debt have been paid on time. There are no late payments showing on my credit report. That right there is 35% of my score and I believe it's the best thing I could have done considering my debt situation. Without that, I'm sure my score would be quite low.

One negative that I always seem to have on my FICO score reports is the fact that most of my credit cards were maxed out. That feels good, I can say were maxed out now :)

With the identity protector program I am on, I will be issued a new FICO score late this month. I am actually looking forward to seeing how much it may raise with the lower balances on my credit cards. I say "may" because you never know, I have found my FICO scores to jump all around in the past (from 706 to 726). I will be a little disappointed if it doesn't raise just a little bit.

UPDATE: My new FICO score has arrived :)

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