FICO's continued
Hope you had a great weekend. Here's a little more on credit scoring. There are basically five factors that determine your FICO score.
1.What is your Payment history? This is worth approx. 35% of your score. The most significant impact on your score is whether you have paid past accounts in a timely manner (on or before the date the payment was due). However, an overall good credit profile can outweigh a few late payments, and late payments have less impact the older they are.
2. Amounts that you owe: how much is too much? approx 30% of the score. Part of figuring out credit scoring is determining how much debt is too much: In some cases, having a very small balance without missing payments shows you've managed credit responsibly, and, may be slightly better than having no balance at all.
While you don't want to have too many accounts open, it's good to have more than one, so that you're not using too much of one account's available credit limit.
Owing a lot of money on numerous accounts suggests to lenders that you may be overextended and more likely to make late payments, or make no payments at all.
More on this tomorrow. Have a great week.
Adam Tarr and Sharon Kotula
Your Phoenix area Real estate choice.