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Credit Score News, Tips & Advice « Credit Scores > Credit Score Advice > Fico releases advisory on how to protect one’s credit score

Fico releases advisory on how to protect one’s credit score

By Sally Maison
Published: Wednesday, October 27th, 2010

Credit scores reveal one’s credit worthiness and now that the economy leans toward being credit-dependent these three-digit scores can really influence a person’s entire life.

Recently FICO released information about how common misuse of credit lines could affect one’s credit score. However how exactly FICO and other credit scoring company come up with scores still remains unknown to the public nevertheless knowing what of the things you do and do not do can hurt your credit worthiness will really help you in understanding why you get a credit score like what you are currently having. If you know what pulls you down you can act upon it before it can drag you deeper into trouble thus this information from the leading credit scoring company will really help consumers.

One of the important things to keep in mind is that people who have excellent credit score standing carry more risk of losing points for every mistake they make. Indeed one factor can send two effects with differing gravity to two distinct credit scores. Let us take for example person A who owns a credit score of 780 and person B who has 680 points. Both of them were not able to settle their bill on time leaving it unpaid for one month. This late payment caused person B a score deduction of 60 to 80 points while person A has her score drop some 90 to 100 points.

For every mistake a corresponding point will be deducted from your credit score and if you have excellent credit worthiness better make sure you avoid making any delinquencies for you will certainly lose more.

Bankruptcy was said to be the most damaging factor to your credit score. If you have bankruptcy record on your credit history you can lose 130 up to 240 points. This is really some serious deduction from your credit worthiness.

In cases of foreclosure your credit score can drop 85 up to 160 points. Another credit mistake that will send your score lower is debt settlement which can take away 45 to 125 points from your credit score. Late payments are also hurting your credit score and this delinquency can take 60 up to 110 points from you. Maxed out credit cards are also included on this list of credit mistakes that would create some damage points on your record. The points are relatively lower which can range from 10 to 45 points.

Now that you have an idea on how much your credit misbehavior is lowering your credit score you can start avoiding especially those that can instantly reduce hundreds from your score.

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