Does Your FICO Score Change With Your Credit Score?

A FICO score is your credit score. FICO is the credit score used most by lenders when assessing your credit risk, according to MyFICO. The numerical score runs from a low of 300 up to a high of 850, and the higher the score, the better your credit. It's wise to understand how a FICO score is generated, and what causes a change in your FICO credit score.

Identification

Your FICO score contains five key elements, according to MyFICO. How much debt you have is 30 percent of your score. Thirty-five percent reflects how well you pay your debts. Fifteen percent is the average length of your credit history. Ten percent is the amount of new credit you've recently obtained, and the remaining 10 percent reflects the mix of credit types found on the report.

Significance

Your FICO credit score is based on the data located within your credit report. The score reflects both positive and negative information but isn't a stagnant number at all. Your FICO score changes as the data within your credit report changes. This means that you can improve your score if it's lower than you would like. How you pay your bills is 35 percent of your score. That's the largest component, so making on-time payments on all of your bills will have a major effect on your FICO score over time.

Prevention/Solution

It's important to make sure your credit report is as accurate as possible. Federal law provides consumers with the right to receive a free credit report. This law is called the Fair and Accurate Credit Transactions Act. Under FACTA, you can order the reports once a year from Experian, TransUnion and Equifax by using the AnnualCreditReport website. Once you have your report, you can dispute any credit report errors online at the credit bureau's website or by phone or mail using the bureau's contact information located on your credit report.

Warning

Negative accounts on your report will lower your FICO credit score. The Fair Credit Reporting Act dictates how long negative items can remain on your credit report. Under the FCRA, if you have late payments, charge-offs, repossessions, a foreclosure or other derogatory data on your report, that information will remain there for up to seven years. In New York, paid judgments and paid collections can remain for up to five years. Bankruptcy can remain for up to 10 years. Unpaid tax liens remain 10 years in California and indefinitely in all other states.