Improving Your Credit Score

Credit Score

FICO® Scores

Do you have a stellar credit score?  According to the developers of the FICO® score, Fair Isaac Corporation, individuals with great credit seem to have “strikingly similar” credit habits regardless of background or life experience. The FICO® score is the best known and widely used credit score model.

FICO® scores range from 300 to 850. You are considered a high achiever if your FICO® score is greater than 785. But don’t fret if you score isn’t there yet, says credit score advisor for myFICO, Anthony Sprauve.

“Higher credit scores can be the key to achieving some of life’s most important dreams: buying a new car, owning a home, putting a child through college, or taking a dream vacation,” said Sprauve. “The good news is that by understanding and consistently practicing behaviors that can lead to high credit scores, anyone can become a FICO® High Achiever.”

Who are these “High Achievers”?

In a recent press release, myFICO reveals details about people with high FICO® scores:

  • High achievers have an average of seven credit cards including both open and closed accounts.
  • High achievers have an average of four credit cards or loans with balances.
  • One-third of high achievers have total balances of more than $8,500 on non-mortgage accounts; the remaining two-thirds have total balances of less than $8,500.
  • 96 percent of high achievers show no missed payments on their credit report, but of those who do, it happened four years ago, on average. Less than 1 percent of high achievers have an account past due.
  • Even some of those with a sterling FICO® Score may have had some bumps along the way. Approximately one in 100 high achievers has a collection listed on their credit report and approximately one in 9,000 has experienced tax liens or bankruptcies.3
  • FICO® high achievers have a well-established credit history and seldom open new accounts. Their oldest credit account was opened an average of 25 years ago and their most recent credit account averages 28 months old. Overall, their average credit account is 11 years old.

Consistent Behavior is Key

“Because a high FICO® Score is typically achieved over time and takes into account dozens of variables, there are no ‘quick fixes’ for rapidly improving scores or repairing bad credit,” said Sprauve. “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.”

Interested in buying a home or refinancing your existing mortgage? Consult a licensed mortgage loan professional to discuss your personal financial situation. Inlanta mortgage professionals can assess your credit situation, issue pre-approvals, or provide advice on credit restoration. Find a licensed Inlanta loan officer near you.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is fully delegated HUD-FHA including FHA 203K, VA, and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016. Inlanta Mortgage is proud to be a recent recipient of a 2012 Top Workplace Award.

To Pay Off or Not To Pay Off

Guest blog written by Sam Parker, Vice President of Heartland Credit Restoration (formerly CreditAbility). For more information or further questions email Sam at or visit

Many people are under the impression that paying off a collection, charge off, or profit and loss will increase their credit scores. Unfortunately, not only will your scores NOT increase but they will actually GO DOWN! It seems a little backward right? You pay a debt and you get dinged for it.

Here’s why! Once a debt goes to collection, the balance is no longer a factor. This means that technically a $5 collection will hurt you just as much as a $5000 collection. The only real factors that matter to your credit scores once a debt has been placed for collection are the DATE OF LAST ACTIVITY and the M.O.P RATING attached to the item. (I’ll explain MOP ratings in the next discussion) .

For the sake of this discussion lets pretend that you have a collection which was last active in October of 2005, this item would have a “9” rating attached, which is negative.

As time passes between present day and the date of last activity this negative item hurts your credit less and less. When you pay this negative item it updates the date of last activity to the current month and year HOWEVER the 9 rating attached to this item remains the same. What does this mean for you and your credit score? It goes down because to the scoring algorithms it appears that a new 9 rated (negative) account just hit your credit.

Some might say it’s best to NOT pay collection then. Unfortunately if left unpaid for too long, most collections will go to a Judgment status, meaning that this debt is confirmed by a court and must be paid.

So what can you do to avoid a mess like this? Get it in writing! If you’re going to pay a collection first get something in writing from the creditor stating that once your debt has been paid, they will either remove this negative item from the credit or update the item to an “unrated status”.

I hope this helps! Feel free to ask questions!

As you’re looking through the credit report what you want to pay attention to is the “rating column.” As most of you know there is a rating system which goes 0-9. It will usually looking something like R9, I9, I1, I9, etc…. The letters before the number are referring to the type of account….R meaning Revolving, I meaning Installment, etc. The number following the letter refers to its status. Below I have listed what each number means.

R0 – Too new to rate. Approved but not used.
R1 – Pays within 30 days of billing or as agreed.
R3 – Pays in more than 30 days, but less than 60 or when next payment is due.
R4 – Pays in more than 60 days, but less than 90 or when two payments are due.
R5 – Account is at least 120 days past due but is not yet rated R9.
R6 – No rating exists.
R7 – Paid through a consolidation order, consumer proposal or credit counseling debt management program.
R8 – Repossession
R9 – Bad debt, or placed for collection or bankruptcy

If you would like to discuss home financing options and your credit status with a licensed mortgage loan officer, click here to find a Inlanta Mortgage branch near you.