What’s going on with your FICO Scores?


What’s going on with your FICO Scores?

What are the four primary credit codes you can only obtain from your mortgage banker or mortgage broker? What do these codes mean to your FICO scores? What can you do to improve your FICO scores? Where can you get help? Can one ‘inherit’ credit from a relative? Over the next several weeks we will answer these as well as the more common questions we get about FICO scores. Please feel free to ask your questions.

Following are pointers one, two and three for all readers. Four, five and six are for those who have had to file bankruptcy or have had a loan modification, foreclosure, deed in lieu or short sale.


1) Older credit is better – do not close old accounts – Reactivate the same consumer inactivated account numbers wherever possible.

2) New credit lease or credit purchase – not good – compensate with use of older accounts, wherever possible.

3) Do not open new accounts to get the 1x seasonal or 1x purchase discount. The cost to your FICO’s is not worth the discount.

4) When reestablishing credit, keep a small balance (no more than 30% and best with 10% or less) and make minimum payments. Keep in mind you are earning or reestablishing your credit reputation. Pay the card off in full monthly as you are building or rebuilding your credit.

5) In setting up a secured credit card, join a credit union, save at least a thousand dollars. Secure this savings with the credit union to be able to set up Visa or Master credit card. This is a vastly more sound way to establish or reestablish credit. The least preferable way is by accepting or obtaining high fee, high interest rate small credit limit unsecured cards. The smaller balance cards have the effect of trapping one into always having lower limits and lower scores. Smaller cards do not allow you to rent a car, buy a plane ticket, etc. Think big, take your time. Set up a savings account with systematic deposits (payroll deduction) into your credit union.

6) Keep TANSTAAFL in mind at all times – There Ain’t No Such Thing As A Free Lunch.

In future articles we will discuss: How you can improve your FICO Scores. We wish to increase your understanding of how your FICO Scores are generated. As well, we will discuss consumer credit topics suggested to me by readers.

Image Credit: Google Images

Financially SpeakingJames Spray CCMB, CNE, FICO Pro | CO LMO 100008715 / NMLS 257365 | June 1, 2010 
Notice: The information on this blog is opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance to make certain your legal interpretation and decisions are correct. This information is not legal advice and is for guidance only. You may use this information in whole and not in part providing you give full attribution to James Spray.


2 comments on “What’s going on with your FICO Scores?

  1. […] two: As discussed in a previous post, you must reestablish credit – in particular you need to establish revolving credit (credit […]


  2. […] with your credit union. Use no more than 30% of the balance within any month. The use of 10% is best. Keep in mind you must use the credit. You are proving you can responsibly manage credit. Your FICO […]


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