Mortgage Credit

FICO the most important number to give you power or take it away.

A high number will grant you opportunities and save you money.

A low number will limit your life and cost you a ton of money.


Now to the basics of the FICO score by Fair Isaac Corporation. 


FICO is a credit scoring model.

The model is calculated with information from a consumer’s credit files.

The basic concept of the FICO score is to put a simple 3-digit number to the credit risk of an individual.


FICO attempts to do this by using just the facts of the actions by the person. The model looks at data gathered from the credit actions of the individual.

FICO is a credit risk analysis based on the data generated by the individual actions as it relates to credit issues. That is, it.

Understanding that FICO is data driven is the key to changing your FICO score. Improve your actions in the areas they track, and your score will go up. Underperform in those areas they track and watch your score go down.

Your FICO credit score is created using the following characteristics:

Your Payment History accounts for 35% of your FICO score. This section answers the questions:


Do you have a history of repaying your credit card bills or installment loans on-time?

Have you have missed payments?

How many missed payment are there?

how recently did they happen?

Do you have a history of bankruptcy or foreclosures?


30% of your FICO score is the amount of credit owed.

How much of your available credit is being used?

Are you carrying a high balance on your credit cards?

How much of an installment loan, like a car loan, is still owed?


These top two portions account for 65% of your FICO score.

So, if you are looking to increases your FICO score this is the area to focus your efforts.


The Length of Credit History accounts for 15% of your FICO.

Do you have a long credit history?

Or are you just starting out?

This is why it is important to start building your credit history as soon as you can. But it must be done with good credit habits. Pay your bills on time etc.


Types of Credit is 10% of your FICO score.

Do you have both installment loans and revolving credit?

How many credit accounts do you carry?


The new credit portion of the FICO is 10%.

Did you open a lot of new accounts recently?

Have there been a lot of inquiries from potential lenders in a short amount of time?

This is the section where how many times your credit report is pulled can impact your FICO score.

Many people focus on this aspect. But it only impacts 10% of the FICO score.


Improving your FICO score happens when you create positive data points in the area FICO tracks over time.