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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.


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

The exception to the High Balance on Revolving Trades is when you look at Very High Limits on Revolving Trades (i.e. HELOCs). Anytime there is a HIGH LIMIT on a Revolving Trade Line (Aprox. 30K or higher) the system will ASSUME and TREAT that trade as an Installment Loan and not effect credit as dramatically.

15% Credit History:

This looks at the Total number of accounts and the Total years of each account and averages.

For example: If you have 3 cards; 1 for 10 years, and the other 2 for 1 year each, you have a total of 12 years averaged out over 3 cards so you have a history of 4 years. For this reason, it is not a good idea to go out and open several cards to get your Ratios down so you can have lower overall balances. Most studies show that somewhere between 3-5 credit cards is a good number to have on a credit report.

10% Type of Trade Lines and Type of History: This counts ALL Categories Open and Closed. One Type of Trade that will effect a score negatively is: Defered Payments on Installment Loans (i.e. 12 no payments on Furniture).

10% Inquires:

That’s right, ONLY 10%

• •

Only looks at the last 12 Months Most individuals are allowed 5-7 inquiries per year On average, each inquiry counts 5-15 points depending on Credit History

Promotional Inquiries:

(i.e. Credit Card Promotion in Mail)

HAS NO EFFECT ON CREDIT However, if you send that notice in to get the promotion, it will count as an inquiry.

Mortgage Inquiries:

If pulled with a Mortgage Code on Credit:

• • •

ALL Mortgage Inquiries Pulled within last 30 days will count as ONE Credit Inquiry. This is a rolling 30 day system. Also, If there are several pulls that occur in a 14 day period, those pulls will not count at all towards inquiries. This will go back 12 months. So, if a credit score is pulled once every 29 days by a mortgage code for a 12 month period, it will only count as 1 inquiry.

Future Mortgage Inquiries: Beacon 5.0 is a new system coming out that instead of a 2 week buffer from the information above, it will become a 45 day buffer period.


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

Bankruptcy: 3 Main Areas Effecting Score with Bankruptcies: • Percentage of Trades Included in BK • # of Inquires Since Judgment Post Performance Since BK People who DO NOT include All Trade Lines in BK will recover faster and have better scores sooner because of the way they can relate to the 3 areas listed above. Collections: If collections are OLD (2+ Years) paying them off or down will more than likely actually LOWER a score because it sparks interest and activity on an account the system thought was dead. If the collection is New or Recent (less than 2 years) paying it off or down could RAISE the score. If a collection is a MISTAKE have it removed and DO NOT pay it (even if it is a small amount). Having it removed will RAISE the score. Paying it may not effect the score, but it will stay with you and continue to keep your score down for a period of 2+ years.

Divorce: A divorce decree DOES NOT protect someone from Liability. For Example: When a house is involved, one party must be refinanced off of the loan for liability to be waived.

Kenton Hopkins MRE, CRS, GRI and David McHugh e-PRO - Consistently Awarded the Top Broker in Beaver Creek with the Vail Valley’s Leading Real Estate Firm - Listed and Sold more property in Beaver Creek than any other Beaver Creek Broker - One of the Vail Valley’s Top Producing Brokers for over 20 years www.BeaverCreekOnline.com • Office: (970) 845-8053 • Kenton’s Cell: (970) 401-3848 • khopkins@slifer.net • David’s Cell: (970) 376-7171• dmchugh@slifer.net

Fico Factors  
Fico Factors  

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