Did you know FICO scores are utilized in over 90% of lending decisions?

Here's a quick breakdown of how the credit bureau determines the FICO score:

35% - Payment History:

This is the biggest factor that affects your FICO credit score. Being a few days late on a couple payments won't be damaging, but it does affect your current status rating. Credit agencies generally use a rating scale of 1-9 to rate your status - 1 being "Pays as Agreed". This means you've been paying the agreed amount by the agreed date with you and your lender. One to thirty days late on a payment brings your status rating down to a 2.

If you're looking to build your credit, the best place to start would be to obtain a free credit report. It can tell you many things about your credit, and it is very easy to see what areas need improvement. You can usually get one free one a year, pay for a monthly service, or a one time fee. Speck Buick GMC pulls from Equifax, Transunion, and Experian, these scores can differ from each other so it's important to see all of these - especially when buying a car.

Beginning the car-buying process? Fill out our credit application online to get started! 

30% - Amounts Owed:

The amounts of debts you have left to pay are what the credit bureau looks at to determine whether you may have too much on your plate. When looking at your credit report, keep in mind that the report generally reflects the payment balance from your last statement. Typically it defines what the lender has reported to the credit bureau. The bureau will look at how many different accounts with a debt balance you carry, credit usage percentage on your credit cards, as well as how much of any installment loans (such as car loans) you've paid so far. To help your score, make sure you work towards getting your debts paid off and on time before you decide on another large purchase.


15% - Length of Credit History:

Credit age is not everything that determines your FICO score, but sometimes it can be the difference whether you receive that loan or not. Lenders want to see credentials of payment with a history of credit.

No credit history? It can be surprisingly easy with patience and commitment to payment. Apply for a basic credit card with your bank. It's a good idea to ask what kind of credit card is best for someone just beginning a line of credit, and usually it also comes with a small starting limit, usually around $500. Only use your credit card for smaller items or services - or just choose one thing you can pay for monthly such as a streaming service like Netflix or Hulu. Regardless of what you decide, make sure it is something that you can easily pay back. As soon as you get your first statement, transfer that full owed amount right to your credit account by the date on the statement. If you're a first-time car buyer with no credit history, doing this 6-8 months before you decide to buy is a great way to get a head start on the car-buying process.

Finally paid off that card? Consider keeping the account, especially if it's your oldest account, as it may be an important part of keeping your credit history a positive influence on your credit history.

10% - New Credit:

Like mentioned previously, patience is a key factor to building credit. It's very important to take it one credit line at a time, and don't open up too many credit accounts in a short period. This can negatively influence your FICO score as it also affects your history.

Inquiries from the last 12 months, such as hard pulls, are considered in your FICO score. Auto and mortgage usually pull multiple inquiries, but it is a myth that this heavily affects your credit score. It may drop a bit, but many times these are treated as single inquiries.


10% - Credit Mix:

Auto installment loans, mortgages, retail accounts, credit cards, and more - how many different types of credit accounts do you manage? The credit bureau will consider your experience with various credit accounts. It's important to know having too many accounts open can present a negative outlook on your FICO scores. Compared to those with a history of successfully managing a credit card, people who don't have a credit line can be viewed as "higher risk". Make sure all different accounts are managed responsibly in order to keep your credit in check.

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