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Building credit can be a little tricky. You need to know where to obtain credit based on your current credit score and the right ratio of types of credit to successfully build or rebuild credit. (Read how to build tradelines for more information)
There are many factors that are taken into consideration when computing your FICO score. In this article, we will discuss the seven habits that people with a high credit score all share in common, giving you the information you need so you can do the same.
Understanding FICO
FICO is a company that was founded in 1956. The acronym stands for Fair Issac and Company and was actually started by a mathematician by the name of Earl Issac and an engineer by the name of Bill Fair.
Their intention was to create a credit score company that could provide analytical information and decision-making services, one of which was to determine proper credit scoring. They created a scoring range between 300 to 850, a system that is used by credit reporting bureaus such as Equifax, TransUnion and Experian to present your credit score. People that are able to rank with scores above 785 are considered low risk and extremely good credit. And almost all of them follow the following seven strategies:
First, those with high credit scores may have large amounts of available credit, but they keep the revolving balances extremely low.
Second, most of these people are not debt free, and at least a third of them have balances of $8500 or more on their nonmortgage accounts.
Third, these high achievers typically never miss a payment, with 96% of them showing a perfect score in regard to making their monthly payment, even if it is only the minimum amount required.
Fourth, even though some of these individuals have had some credit problems along the way, including bankruptcies or tax liens, because they are making their regular payments, it does not affect their score as badly as a missed payment affects someone with bad credit.
Fifth, we mentioned that high achievers use only a small amount of their available credit. Specifically, they only use 7% of the revolving credit that is available to them.
Sixth, people with great credit scores typically do not open new accounts and have had the same accounts for 11 years on average.
Finally, since your payment history represents 35% of your FICO score, it is clear that consistency in making monthly payments on all of your credit accounts is the key to maintaining the highest credit score possible, something that all people with the highest credit scores have in common.
Forming Good Credit Habits
According to google, it takes 66 days for an activity to become a habit. 
So if you currently have a low credit score, you are probably aware of what it takes to start to improve your credit score.
You can repair your credit on your own and we have lots of articles on this site to help you. But you must take action! Some clients that use one of credit repair services do so because they realized that they just didn’t have the time to really focus on fixing their credit. They would get started but 60 days later they realize all they have done is send out 1 letter and haven’t even followed up with the credit bureaus about their disputes!
Once you have your credit score up. Start implementing the habits outlined in the article above. Focus on:
- Paying down your debt
- Keeping your usage low
- Not applying for credit unless you truly need it!
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Updated 8/8/17 by Liz Roberts
CL Jones
March 13, 2013Apparently society would rather make CRA’s wealthier becoming a statistic with a number rather than a human with needs, desires and abilities. Computers attempt to predict behavior, however it fails to take into consideration events, catastrophic, and refusal of any and all lenders, or creditors to understand and say let us have opportunity. They do not care as government will bail them out, where consumers have no recourse if there are major events that create havoc.
I say ban credit scoring all together.
Dani
March 13, 2013Using very little credit will help you in the long run. You don’t have to worry about debt and it secures your credit rating.
Sandra
March 20, 2013If you use credit only for emergencies you will likely be okay. As long as you keep it for that.
Kelly
March 21, 2013Credit triggers temptation and this is why people get into trouble with it. It’s tempting to spend money, without thinking of the consequences. However I am surprised to read that people with good credit do not open new bank accounts.
Danni
March 22, 2013One thing you certainly would expect from people with good credit is that they pay their bills on time. My mother was always careful with that and never spent money she did not have. Her credit score was close to perfect.
Talia
March 24, 2013It must be very rare for people these days to have good credit unless they are wealthy. I don’t believe that the majority of the reason that people end up in such serious debt is due to poor spending habits. I think they just don’t have enough money for emergencies like if someone gets sick or something. That alone can use up a lot of credit.
Brooke
April 6, 2013I’ve got a long way to go to be able to develop the habits of the people with high credit scores. All my credit cards have balances on them, including two which have 50 percent balance and another two with about 30 percent, so I’m not even close to the ideal number. It’ll take time for me to lower my balance, but once I do I’m gonna do my best to develop these habits as well.
Melanie Mathis
April 12, 2013You can do it Brooke. Take one step at a time. Eventually you will reach your ideal credit balance.
Nikita
September 1, 2017Wow these facts are really encouraging. I feel like there is hope in a situation I thought was hopeless. This is just what i needed to read.
Melanie Mathis
October 30, 2017Glad we can help! Make these tips into a habit and you will see improvements to your credit!
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