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This article was prepared for the June 27, 2001 edition of U.S. 1

Newspaper. All rights reserved.

Your FICO Matters

The Consumer Credit Counseling Service of Central


with offices in Trenton, says a good FICO score can make the


between getting a good rate on a loan and paying way above prime.

FICO is short for Fair, Issac & Co. and is also the name of a credit

scoring system the company created to measure creditworthiness. A

FICO score is often the first thing creditors review when a consumer

applies for a credit card, a car loan, or a home mortgage. FICO scores

are now available online at for $12.95 from Fair, Issac

& Co. and the Equifax credit bureau. You get your three-digit FICO

score along with score improvement tips and your Equifax credit


The Experian and Trans Union credit bureaus also have FICO credit

scoring systems.

Here are tips from the Consumer Credit Counseling Service


on improving FICO scores.

Do what the FICO report says. Your FICO report may tell

you what you can do to improve the score. These tips are called


codes" and many reports include at least four, including amount

past due on accounts, too many accounts with balances, or too few

accounts with recent payment history.

Pay off your credit on time. When you pay on time, your

score goes up. It goes down when you pay late. Not surprisingly, your

pay history accounts for 35 percent of your FICO score.

Review your credit reports periodically. Credit bureaus

make mistakes, and they provide information that goes into your FICO

score. It’s a good idea to check your credit report from time to time,

and New Jersey residents can order a free credit report from each

of the three leading credit bureaus per year. The telephone numbers

for the leading credit bureaus are: Equifax (800-685-1111); Experian

(888-397-3742); and TransUnion (800-888-4213).

Close old accounts cautiously. Believe it or not, closing

that old college account could lower your score by shortening your

credit history. Your FICO score takes into account how long you have

had credit.

Stay put for a while. Stay in the same residence for five

years or more, and you could see your credit score increase.

Maintain at least one credit card account. Pay with cash

all the time and the FICO formula will not have anything to measure.

You will need to open at least one account for six months to get a


Limit credit card applications. An inquiry can go into

your credit report when you apply for a credit card. Too many


can lower your score because creditors may be wary of people trying

to amass a lot of credit or who jump from card to card.

Keep five credit cards or fewer. Research shows that


who carry balances on a lot of credit cards are a greater credit risk

than the general population.

The Consumer Credit Counseling Service says "when it come

to credit, what you don’t know can hurt you." A needlessly low

score can add hundreds, or even thousands, of dollars a year in


charges to credit card, car, and home loan payments.

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