1. Manage Your Payment History.
2. Control Your Use of Available Credit.
3. Age Your Accounts.
4. Mix Your Credit Types.
5. Minimize New Credit.
Regarding on tip # 1 of the blog Manage Your Payment History, the way fico is evaluating this factor is:
1. How often have you failed to pay on time?
2. How far “past due” were you?
3. How much did you fail to pay?
- Use an automatic payment system for loans with fixed payments (installment loans, mortgages, etc.); and for revolving credit payments establish a reliable calendar or “reminder” system that you can count on.
- Never “skip” a payment. Even if you can’t pay a bill on the due date, don’t just let it go for a month. Creditors normally don’t report a “late pay” to the CRAs until an account is 30 days past due, but there is no guarantee that they won’t. If you find that you can’t pay a bill until it is 10 or 20 days late, make the payment as soon as possible. Above all, don’t let the account go unpaid for 30 days.
- If you’re “short” in a given month and you can’t pay all your bills, do whatever you have to do to come up with the necessary money. Borrow it from a friend, draw down on your savings if you have any, sell something of value on eBay, hock your guitar, whatever; just don’t let any of your creditors report that you are “late” on any of your accounts.
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