Contact Kenton Hopkins MRE, CRS, GRI or David McHugh e-PRO for Additional Information (970) 845-8053 - (970) 376-7171 - khopkins@slifer.net & dmchugh@slifer.net
FICO FACTOR There are 40 Main Areas that effect credit. When a report is pulled, the Top 4 Areas effecting that report are listed. These are called Factor Codes. The main Factor the credit agencies look at is, “What is the likelihood ANY Trade Line will become 90 Days Late?” Keeping the above statement in mind, below are the main areas used to determine an individual’s FICO SCORE and the weight given to each area.
35% Payment History:
This is the area that effects the score the most.
There are 3 main categories in this section: How Recent: When did it happen? 0-6 Months- Hurts the score dramatically 7-23 Months- Effects it bad, but not as much 24+ Months- Still effects the score, but not dramatically How Frequent: This is a LARGE predictor of Risk. The more Frequent the lates, the more it hurts the score How Severe: The more severe the abuse, the more the score is effected
30% Balances:
Balances are a direct reflection of REVOLVING TRADE LINES. It is a Ratio of Total Credit AVAILABLE vs. Total Credit CHARGED If 50% Ratio, the Score is effected Hard If 75% Ratio, the Score is effected Very Hard For Example: If you have 5 credit cards each with a limit of 5K and 1 card has 4K charged and the other 4 have a 0 balance, you have 25K in available credit and 4K charged. You have a Ratio of 16%. However, if you were to close the 4 accounts with 0 balances, you would then have 5K in available Credit and 4K used. Your ratio would then move to 80%. The FICO could be effected dramatically. On a side note, with the first scenario, it would be better to have the 4K spread out over several cards and not just all on one card.