Habits for a High FICO Score


FICO, the developer of the most popular credit risk score today, recently revealed some habits and behaviors of "high achievers" with FICO scores above 785:

  • They keep low revolving balances relative to their available credit
  • They don't max out their credit cards, and 
  • They consistently make payments on time.

Interestingly, these people are not necessarily debt-free. 

  • They have an average of seven credit cards, including open and closed accounts, and 
  • They carry balances on an average of four credit cards or loans. 
  • One-third have balances of more $8,500 on nonmortgage accounts.

More relevant, almost none — less than 1% — have an account past due.  96% have no missed payments on their credit report. 

Payment history makes up 35% of how a person's FICO score is calculated. Thus, managing credit responsibly over time plays a large part towards improving one's credit score.  

"Persons with high FICO scores typically have long, well-established credit histories and rarely open new accounts", FICO said.  "Their balances are often low and they use only an average of 7% of their available revolving credit, i.e., $70 on a credit card with a $1,000 maximum."

FICO uses both positive and negative credit information in five general categories to calculate  persons score:

  1. Payment history, 
  2. Amounts owed, 
  3. Length of credit history, 
  4. New credit, and 
  5. Types of credit used.

"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."

About the Author

Brandon Lau grew up in Kailua and currently resides in Honolulu with his wife Andee and children Caylah, Elijah, and David. His eighteen years in real estate led him to become a Partner at ChaneyBrooks Choice Advisors. Over the past 10 years he has developed the team and systems that has created a high level of service and value for his clients.

What differentiates Brandon and his team is his consultative approach to real estate. He advises clients with relevant data and expert insight to help them make the best choices in real estate. Good choices in planning for long term dispositions, negotiating for the best price or knowing when not to pursue an investment are ways his consultative services will give you an advantage in the marketplace. His bottom line is providing service with the utmost integrity and expertise.