Good news is my FICO scored remained the same since last October. The bad news is it hasn't improved. I was hoping that by reducing my debt by $4,200+ since October, my FICO score would have improved by a point or two. But then again, my credit union ran my credit report last November, which may have affected my score as well.
The biggest cause of my mediocre credit score is past late payments and delinquencies. I anticipate that those items will fall off in 2010. I guess I can only continue to pay my bills timely and bide my time.
Here's what FICO's website had to say about my score:
Key Factors Affecting Your FICO® Score
1. You have a serious delinquency (60 days past due or greater) or a derogatory description on your credit report
The presence of a serious delinquency or a derogatory description is a powerful predictor of future payment risk – people with previous late payments are much more likely to pay late in the future. However, as these items age and fall off of your credit report, their impact on your FICO® score will gradually decrease. Most late payments stay on your report for no more than seven years.
2. You have multiple accounts showing missed payments or derogatory descriptions.
Your FICO® score takes into account missed and late payments in a few ways. These include the number of late payments, how late they were and how recently they occurred. Your score was hurt because your credit report shows multiple accounts with missed payments or derogatory descriptions.
What to do about this: If the late payments on your credit report are valid, you should focus on continually paying all your bills on time. This will demonstrate a good payment history and these late payments will have less of a negative impact on your score as time passes.
Higher FICO® Scores Save You Money on Loans
Check out how people with higher FICO® scores qualify for lower monthly payments on a $300,000, 30 year fixed-rate mortgage:
Rates accurate as of November 1, 2008
FICO® score APR Monthly payment
See today's rates for other types of loans and loan amounts
760-850 6.303% $1,858
700-759 6.525% $1,901
660-699 6.809% $1,958
620-659 7.619% $2,122
580-619 9.451% $2,512
500-579 10.310% $2,702