Credit Scoring Quick Answers
What does a credit score range from? 300 to 850
What is a good score?
680 and above is considered “A” credit
What determines the credit score?
35% payment history (lates, collections, charge-offs, public records) 30% account utilization (balances being carried)
15% length of credit history
10% types of credit (mixture is best)
10% inquiries (only the first ten count)
Should a person pay-off their debt?
The only debt that should be paid during the loan process is unsecured debt (credit cards.)
Paying collections will decrease the credit score due to the date of last activity becoming
recent. But if you do decide to pay off a collection, MAKE SURE that the creditor gives you a
letter of deletion first.
What balance should I carry on my credit card to maximize my credit score?
As close to zero as possible, but if you can’t pay them to zero, make sure that all
balances are under 50% of the limit, preferably 30%.
Should I close any of my credit cards?
NO. If you close credit cards your score will most likely go down. It will appear to the
FICO that your debt ratio has gone up. Also, closing a card will effect other factors in the
score such as length of credit history. If you have to close a credit card account, make sure
it is a more recent account.
How much do inquiries hurt the score?
Between 2 and 50 points, but only for a year from the date of the inquiry. Only the first ten
inquires are counted and all auto and mortgage inquiries made within a 14 day period
are treated as one.
Does the score go down if a person runs their own personal credit report?
NO. You can pull your report as many times as you want personally, and it will not
effect your score.
How many credit cards should a person have? 3 to5 cards is best.