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5 Habits of 800 FICO scorers

May 2nd, 2022 8:43 PM by Sam Kader MLO# 130505

Having a good credit score is a lifetime process and it is impossible to achieve overnight. Here are 5 tips you should incorporate in your habit today: 

1. Pay your bills on time. It accounts for 35% of your credit score. One late payment can negatively affect your credit score. 96% of consumers with an 800 credit score pay credit accounts on time; 68% of those with a score of 650 have past due accounts. Even paid past due accounts will remain in your record for 7 years. Tips: Set-up your account with auto-pay so you do not miss a payment. 

2. Minimize credit usage. Credit utilization accounts for 30% of your credit score. This factor is the ratio of used credit divided by available credit. The higher the ratio, the lower the credit score. 800 credit score ratings are obtained by those who use about 7% of their available credit while those with a score of 650 have typically maxed out their available credit. Tips: Paying your balance to below 50% of available credit line will increase your score sooner. Please inquire about our Rapid Rescore. 

3. Try to avoid credit checks. Getting hard inquiries from a mortgage company, bank, auto loan or even an additional credit card will cause your credit score to drop. Tips: Shop within 30 day span from multiple lenders and banks. This will count as 1 hit. Please inquire about our soft inquiry. 

4. Keep a long credit history. This accounts for 15% of your credit score. The longer the credit history, the more trustworthy your borrowing status. Tips: Do not close your older, inactive accounts since this will reduce your credit utilization ratio. 

5. Maintain low balances on credit cards. Most people who have 800 credit score never pay the interest due to the fact that they pay their balances in full every month. Tips: If you can't pay in full - paying down to 50% of available credit line will help. See item 2 above.  

Each credit score bureau (Experian, Equifax and Transunion) has its own method of credit scoring with each assigning a different credit score.  You can check your own credit report for free annually and if you suspect any foul play - you can freeze it for free. Should you find an error in your credit report - please follow this instructions from Consumer Financial Protection Bureau (CFPB) on how to address it legally. You can fix most credit error yourself for free without involving a costly credit repair company (I can guide you along the way).  

If you have a collection account - DO NOT pay it. Here's why.  If you have no credit profile - please start here. It will take at least a few months but it's progress. Tips: Please inquire about our non-traditional credit lines to help you qualify for a home loan.  

Posted by Sam Kader MLO# 130505 on May 2nd, 2022 8:43 PM



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