- 1). Contact the Federal Trade Commission to order copies of your credit history. You can get these copies for free and use them for evaluating your credit standing. Order them online on FTC's website or call at 877-322-8228.
- 2). Assess your payment history, which counts for about 35 percent of FICO score. Preferably, all the bills should be paid on time. However, don't worry if there are a few payments delayed for a few days, as a rare lapse doesn't bother most lenders. On the other hand, if even a single payment has been delayed for 30 days past the due date, it can seriously injure your credit score. In fact, it can take about 100 points off the rating.
- 3). Sum up your debt obligations, if any. Debt is perhaps the second most significant factor that accounts for nearly 30 percent of FICO. The important thing here is the actual size of your payments. Mortgages cover a relatively small payment of the total debt so a lending institution might weigh the mortgage payments less heavily than other payments like your credit card bills or other borrowing, which requires a bigger payment of debt each month.
- 4). Consider the "type" of debt you have. This accounts for almost 10 percent of your FICO score. The two main types of debt are secured debt and unsecured debt. Secured debts include any types of mortgages and card loans etc., for which you put up something valuable as collateral. Unsecured debts, on the other hand, include debts like credit cards where nothing valuable has to be put as collateral. Secured debts can add to your score while unsecured debts are a minus.
- 5). Take into consideration the "time factor." Sum up the number of accounts that you closed in the previous year and the number of applications you made. Closing one or two accounts is normal but if you keep opening and closing credit accounts, it adds negative point to your credit score (10 percent of FICO).
Additionally, the longer you take to consume your credit, the better it is for your FICO score (15 percent of FICO score). - 6). Take into account secondary factors, which might affect your credit score negatively. For instance, a foreclosure or bankruptcy can be devastating for your credit score. Other problems like a tax lien can stay on your credit record for 10 years or more. A default on a loan (such as student loan) can stay with you for life.
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