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|myFICO® Reveals Techniques of People with the Highest Credit Scores in the Nation|
"Higher credit scores can be the key to achieving some of life's most important dreams: buying a new car, owning a home, putting a child through college, or taking a dream vacation," said
High Achievers Share Common Habits
"A high FICO Score is absolutely possible for anyone to achieve over time," added Sprauve. "That's why on myFICO.com we offer a free educational roadmap that can be used by individuals to help them make the best decisions for themselves as they pursue their goals, and to learn directly from real people who've tackled similar challenges and succeeded."
Using Credit and Paying it Off
While it may come as a surprise, high credit achievers are not debt-free. They typically have multiple credit cards with balances; however, they also tend to manage their accounts responsibly even if they have had mishaps along the way.
Because payment history is the largest portion (35 percent) of an individual's FICO® Score, managing credit responsibly over time plays a large part towards improving one's credit score. This includes paying at least the minimum amount on all credit cards every billing cycle. "Missing payments will lower a person's FICO Score, but if that happens, establishing or re-establishing a good track record of making payments on time will generally improve a person's score," said Sprauve.
Many people have achieved a high FICO® Score without using credit cards at all. However, in some cases, using a credit card for an occasional small purchase can indicate responsible credit management and may actually be slightly better than not using credit cards at all. High achievers often keep balances low and only use an average of seven percent of their available revolving credit.
"While people with a high FICO Score are not perfect, their consistently responsible financial behavior usually pays off over time," Sprauve added. "In a challenging economic period, the fact that we all have a chance to be high achievers is very good news. The lesson from these high achievers is that it's never too late to rebuild and score high."
Why Are Credit Scores So Important?
Credit scores help lenders estimate credit risk and a person's likelihood to repay loans, and can affect how much money a lender will offer and at what terms. Higher credit scores empower individuals by helping them realize their goals at potentially lower costs.
The FICO® Score is based only on information contained in an individual's credit report and does not take into account personal attributes such as race, gender, age, marital status, salary, employment history or address. FICO considers both positive and negative credit report information within five general categories. The percentage weight of each category is based on its importance to the scores of typical consumers. For particular groups—for example, people who have not been using credit long—the relative weight of these categories may be different.
"Because a high FICO Score is typically achieved over time and takes into account dozens of variables, there are no 'quick fixes' for rapidly improving scores or repairing bad credit," said Sprauve. "Practicing good credit behavior consistently over time and regularly checking your credit report for errors can be instrumental for achieving a high credit score, which can lead to better loan terms and lower interest rates. Achieving good credit health is a long distance event, not a sprint."
For additional information on FICO® credit scores, or participate in the free user forums for peer-to-peer advice and support, visit myFICO.com.
1 High achievers analysis was completed using
myFICO® is the consumer division of FICO, the company that invented the FICO® Score, a credit risk score which serves as a de facto credit score used by the vast majority of lenders in
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