October 24, 2012
You've probably heard of your FICO score. Lenders use the score to determine approval for mortage or auto loans and loan interest rates.
The highest possible score is 850 and the average FICO score is 690.
About 25% of people have a score of 785 or higher. Mandi mandi Woodruff of Business Insider says there are reasons those people have such a high score.
Here's what you need to know about them.
1. They're not debt free. On average they carry an arsenal of about seven credit cards.
2. But they are minimalists. Only carrying balances on about four credit cards or loans at a time.
3. The vast majority carry less than $8,500 in total debt: Not including mortages while about 1/3 carry more. For the most part they use less than 7% of their available balances. That's $700 on a $10,000 card.
4. They know punctuality is key. Payment history makes up about 35% of your FICO score. 96% show no missed payments on their credit report.
5. Not all high achievers started out as one. About one out of every 100 has been hassled by a collector and one out of 9,000 have dealt with bankruptcies.
6. They rarely open new accounts and are loyal customers. On average their oldest credit card was opened 25 years ago, but most have been open for about 11 years.
For a link to the entire article by Mandi Woodruff of Business Insider, click on the link below.