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UNDERSTANDING THE FIVE COMPONENTS OF
1. PAYMENT HISTORY = 35%
In the calculation of your FICO credit score, no factor is more
important than your payment history. That history is comprised of
many complex components, but ultimately, experts say, it's pretty
simple: pay your bills on time, every time.
2. TOTAL DEBT = 30%
If you want to earn a good score, you'll need to pay attention to your
amounts owed–the 2nd most important factor used to calculate a
borrower's FICO score.
3. LENGTH OF CREDIT HISTORY = 15%
It may not be the most important factor, but if you don't have a long
credit history, you can probably forget ever having a perfect score.
Plus, without at least some length of credit history, you won't have a
score at all.
4. NEW CREDIT = 10%
Taking on too much new credit too quickly can hurt your FICO
credit score. However, adding 'new credit' to an old, troubled
account may actually help your score. Confused? Welcome to the
complex world of the FICO credit score.
5. TYPES OF CREDIT = 10%
Want good credit? Responsible use of a single loan can get you
there. But if you want a top credit score–the kind that gets you the
best rates, the highest limits and the sweetest deals–you're going to
have to mix it up a bit.