If you get a FICO credit score, or any other credit score, be sure to read the analysis or summary that comes with your report, explaining why your credit score is a certain number.
Watch out for these types of negative statements:
- Amounts owed on revolving accounts is too high
- Amount past due on accounts
- Serious delinquency, derogatory public record, or collection filed
- Time since delinquency is too recent or unknown
- Too many accounts with balances
Beyond late payments and other delinquencies, some other reasons that your FICO scores may take a hit are if you have too much credit card debt outstanding, if you have too many recently opened accounts, or if you have a high number of credit inquiries.
According to Fair Isaac, creator of the FICO score, there are five criteria that go into formulating your credit score:
- your payment history makes up 35% of your FICO score
- the amount of debt you owe comprises 30%
- your length of credit history accounts for 15%
- the existence of new credit, or inquiries, makes up 10%
- and the type of credit you’re using each constitutes the final 10%
Use this information to take immediate action to improve your credit score.