Predicting a FICO score
Post Fiend
Joined: Oct 2002
Posts: 11,314
Likes: 4
Easy to correct within a year....
a stated - get one credit card - buy something on it, pay it off after the stmt comes in...
continue until they bounce your credit to a higher amount... (u can always ask !)
make a 1 year loan and pay it off in installments...
do NOT close out the accounts... (stupid, but it LOWERS your score
)
keep the available balance available....
think this months readers digest had exactly how to do this ....
http://www.rd.com/search.do?query=cr...ores&x=36&y=21
a stated - get one credit card - buy something on it, pay it off after the stmt comes in...
continue until they bounce your credit to a higher amount... (u can always ask !)
make a 1 year loan and pay it off in installments...
do NOT close out the accounts... (stupid, but it LOWERS your score
)keep the available balance available....
think this months readers digest had exactly how to do this ....
http://www.rd.com/search.do?query=cr...ores&x=36&y=21
Super Moderator
Joined: Jan 2008
Posts: 40,054
Likes: 1,524
From: Maine, Virginia
The peope with the best FICO scores are the people who have a variety of credit venues such as:
House payment
Revolving credit (credit card)
Auto loan
Personal loan
Everything must be paid on time or ahead of time. It's wise to pay more than the minimum balance due. And lastly, the rule of thumb is, if you have a credit card, ensure your balance owed does not exceed 80% of your available credit.
A lender likes to see that you can manage all types of credit at once. Doing this will land you in the high 700's or low 800's so ong as you don't break the debt to income ratio.
Tim
House payment
Revolving credit (credit card)
Auto loan
Personal loan
Everything must be paid on time or ahead of time. It's wise to pay more than the minimum balance due. And lastly, the rule of thumb is, if you have a credit card, ensure your balance owed does not exceed 80% of your available credit.
A lender likes to see that you can manage all types of credit at once. Doing this will land you in the high 700's or low 800's so ong as you don't break the debt to income ratio.
Tim
Thread Starter
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Fleet Mechanic
Joined: Feb 2004
Posts: 1,816
Likes: 3
From: River Valley AR
Thanks for all the responses. All the advice that you guys/gals have given is appreciated. I want to try to re-phrase my original question:
With a mathematical formula, you can solve for an unknown. Since the FICO is based on a formula, you should be able to determine the result if you know the equation.
If I want to go to a FICO of 650 in one year, what kind of numbers am I going to have to demonstrate to get there?
If I take out a cash secured loan for $xxxx and take a year to pay it back, that's fine, but if at the end of that year my FICO is 350, then there's no point in doing all this other than to build credit in general, and I don't generally use it.
Somebody somewhere has probably got a chart in their desk drawer that does this, huh?
With a mathematical formula, you can solve for an unknown. Since the FICO is based on a formula, you should be able to determine the result if you know the equation.
If I want to go to a FICO of 650 in one year, what kind of numbers am I going to have to demonstrate to get there?
If I take out a cash secured loan for $xxxx and take a year to pay it back, that's fine, but if at the end of that year my FICO is 350, then there's no point in doing all this other than to build credit in general, and I don't generally use it.
Somebody somewhere has probably got a chart in their desk drawer that does this, huh?
Super Moderator
Joined: Jan 2008
Posts: 40,054
Likes: 1,524
From: Maine, Virginia
Thanks for all the responses. All the advice that you guys/gals have given is appreciated. I want to try to re-phrase my original question:
With a mathematical formula, you can solve for an unknown. Since the FICO is based on a formula, you should be able to determine the result if you know the equation.
If I want to go to a FICO of 650 in one year, what kind of numbers am I going to have to demonstrate to get there?
If I take out a cash secured loan for $xxxx and take a year to pay it back, that's fine, but if at the end of that year my FICO is 350, then there's no point in doing all this other than to build credit in general, and I don't generally use it.
Somebody somewhere has probably got a chart in their desk drawer that does this, huh?
With a mathematical formula, you can solve for an unknown. Since the FICO is based on a formula, you should be able to determine the result if you know the equation.
If I want to go to a FICO of 650 in one year, what kind of numbers am I going to have to demonstrate to get there?
If I take out a cash secured loan for $xxxx and take a year to pay it back, that's fine, but if at the end of that year my FICO is 350, then there's no point in doing all this other than to build credit in general, and I don't generally use it.
Somebody somewhere has probably got a chart in their desk drawer that does this, huh?
Tim
Posting Guru
Joined: Jul 2004
Posts: 1,627
Likes: 0
From: West Valley Utah
There is no one specific formula to arrive at a persons credit score. The information below describes it pretty well.
Many different formulas are used to calculate credit scores, but most are based on the following factors, which each scoring model weighs differently:
Payment history
If you have a habit of late payments on your current and past credit accounts it will lower your score.
Public records
Your public record such as bankruptcies, judgments, and collection items may lower your score.
Amount owed
Owing too much will lower your score, especially if you're approaching your total credit limit.
Length of credit history
In general, a longer credit history is better.
New accounts
Opening multiple new accounts in a short period of time may lower your score.
Inquiries
Whenever someone else gets your credit report -- a lender, landlord, or insurer, for example -- an inquiry is recorded on your credit report. A large number of recent inquiries may lower your score.
Accounts in use
The presence of too many open accounts can lower your score, whether you're using the accounts or not.
Mathematical formulas divide the importance of the information into a final score with a break down similar to this:
Your past record or history of paying your credit cards on time is vary important and represents up to 35% of the final score.
The amount of debt represents around 30% of your score.
The length of your credit history that can be verified adds up to 15% of your score.
The amount of recent or new credit will factor about 10% of your score.
We don't know how much weight is given to paying your mortgage on time compared to paying your car or credit card on time. We have read that the
types of credit used impacts the score by about 10%.
The good news for many borrowers, is that your income represents 0% of your credit score. The credit bureaus do NOT have access to your income.
It is also interesting to note that only
10% to 15% of all borrowers have FICO SORES over 800.
Bottom line...pay all your bills in a regular timely manner following the terms given by the creditor. Obtain only enough credit to manage your financial affairs in a reasonable way. Plan your purchases. Limit the inquiries. Make it a lifetime goal to persistently pay down your debt ahead of the creditors schedule.
Many different formulas are used to calculate credit scores, but most are based on the following factors, which each scoring model weighs differently:
Payment history
If you have a habit of late payments on your current and past credit accounts it will lower your score.
Public records
Your public record such as bankruptcies, judgments, and collection items may lower your score.
Amount owed
Owing too much will lower your score, especially if you're approaching your total credit limit.
Length of credit history
In general, a longer credit history is better.
New accounts
Opening multiple new accounts in a short period of time may lower your score.
Inquiries
Whenever someone else gets your credit report -- a lender, landlord, or insurer, for example -- an inquiry is recorded on your credit report. A large number of recent inquiries may lower your score.
Accounts in use
The presence of too many open accounts can lower your score, whether you're using the accounts or not.
Mathematical formulas divide the importance of the information into a final score with a break down similar to this:
Your past record or history of paying your credit cards on time is vary important and represents up to 35% of the final score.
The amount of debt represents around 30% of your score.
The length of your credit history that can be verified adds up to 15% of your score.
The amount of recent or new credit will factor about 10% of your score.
We don't know how much weight is given to paying your mortgage on time compared to paying your car or credit card on time. We have read that the
types of credit used impacts the score by about 10%.
The good news for many borrowers, is that your income represents 0% of your credit score. The credit bureaus do NOT have access to your income.
It is also interesting to note that only
10% to 15% of all borrowers have FICO SORES over 800.
Bottom line...pay all your bills in a regular timely manner following the terms given by the creditor. Obtain only enough credit to manage your financial affairs in a reasonable way. Plan your purchases. Limit the inquiries. Make it a lifetime goal to persistently pay down your debt ahead of the creditors schedule.
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