FICO released some of their secrets to their scoring models back in 2000. Most people don’t take the time to understand what they really mean and how they affect their credit.

So I’m giving you the cheat sheet, and hope that you follow these simple rules.

1. If you carry a balance on your credit cards from month to month, try and keep the balance at or below 30% of the credit limit. For example, if you have a credit card with a $1000 credit limit, keep your rolling balances at or below $300. FICO rewards you for having 70% of available credit on the account. Maxed out credit cards are not responsible management of debt in the eyes of FICO.

2. Try also to keep inquiries (creditors pulling your credit) at or below 5 per year. With the number of inquiries above 5, it appears that you are aggressively trying to obtain multiple credit lines to potentially over extend yourself. Or it also appears that you may have been turned down for credit and are desperately trying to obtain credit which FICO deems to be negative.

3. Here’s a big one…Credit Diversity. The magic numbers for types of credit are 3-5 revolving credit cards, at least 1 installment account (auto for example), and if you can manage to have a mortgage or 2 on the credit report, this will only increase the diversity and your credit scores. The ability to manage all 3 of these credit types successfully is a major plus in the eyes of the FICO scoring models.

4. Time is of the essence…meaning you should never close old credit card accounts. The older the credit line, the better it shows that you were able to maintain that credit card with good payment history without the creditor closing the account. This shows responsibility, and you are a lower credit risk and are rewarded in points to your FICO score.

5. Payment history is one of the heaviest weighing factors to your credit score. So do everything you can to be on time. If you do fall behind, and the account goes to collection, you need to remember this…Once you are able to pay the collection, contact the collection agency and REQUEST A DELETION LETTER FOR PAYMENT. Most people don’t do this and miss an opportunity to easily have the collection deleted from their credit report! Not all collection agencies will give you this DELETION LETTER, but you won’t know if you don’t ASK!!! A collection account can stay on your credit report for up to 10 years, so it is critical to follow this simple step. If they don’t give you a deletion letter, and just give you a zero balance letter, there is still hope to have the account removed. The interest in reporting this account to your credit is diminished upon payment. So when we dispute the account through the bureaus, the collection company typically won’t respond and the account is deleted.

So there you have it, those are the 5 key ingredients that you need to keep in mind regarding your credit. Follow these simple steps and I assure you that your credit will be in excellent shape!

Jason Hall
Board Certified Credit Expert

EZ Credit Repair, LLC

Toll Free Phone - (866) 979-1099 x204
Phone - (949) 467-9090
Fax – (949) 548-8818
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