True or False?

Once I have all of the information from my credit report, I still cannot calculate my own credit score.

True.

The Fair Isaac Corp., which designed the FICO score, has issued guidelines regarding which factors are included in your credit score.

These are:

• 35% for Payment History

• 30% for Amount Owed

• 15% for Length of Credit History

• 10% for New Credit

• 10% for Types of Credit

But they have not, and probably never will, given a breakdown on how each factor is calculated. For example, 10% of your score is for the type of credit used.

But some unanswered questions are:

• Do I need to have a mortgage to get the maximum score in this area?

• How many installment loans is the right amount?

• Do I get penalized for having too many or too few credit cards?

That's enough to give you the idea. Even though you can't calculate your exact credit score, you can still manage your credit score. By using the guidelines you can develop a financial plan that considers these guidelines. The end result should be a higher credit score.

Remember, if you’re not working the system, it’s working you.

PapaJoe

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