Improving your FICO Scores
For a long time, longer than I care to remember, FICO Scores aka credit scores have been an super secret formula where only the credit reporting bureaus (Experian, Transunion, Equifax) knew how they worked. This, of course, is because they are the ones who created the system. For too long, we all wondered how to improve our credit scores while mortgage professionals tripped over themselves trying to provide a homebuyer a logical answer. However, it still remains a complex formula based on factors that we likely will never know how they actually work.
Getting and maintaining good credit isn't rocket science, we just need to pay our bills on time, keep our balances low and sparingly take on new debt.
FICO's information demonstrates that a bankruptcy tends to do the most damage to a person's scores. I can damage scores up to 240 points.
Credit Card/ Revolving Debt
Those with good or excellent credit - aka Prime Borrowers - put their scores at risk with a simple mistake. For example, someone with an average score of 680 who might make a payment 30 days late can experience a 60 to 80 point drop in their score. However, someone with an excellent score of 780 - that same late payment can plummet their score by 90 to 100 points. (Read More)