Click here to donate!

Budget and Credit Counseling FAQs

FICO® scores were developed by the Fair Isaac Corporation in order to simplify borrowing and remove bias from the decision-making process. Using advanced mathematics and analytics, Fair Isaac created a formula that rewards good consumer behavior by adding points and admonishes bad consumer behavior by subtracting points from an individual’s credit score. FICO® scores provide a reliable guide to future risk based solely on credit report data.

Each of the three major credit reporting agencies — Equifax, Experian, and TransUnion—use the FICO® formula to determine your credit score. Lenders buy these scores from each of the credit reporting agencies.

Your credit score is a number that summarizes your credit risk, based on a snapshot of your credit at a particular point in time. Your credit score helps lenders evaluate your credit report and estimate whether or not you are a good credit risk.

Personal Information

  • Your name, address, date of birth, social security number and employment information

Account Information
Types of Accounts (i.e. bank cards, auto loans, mortgage, etc.)

  • Dates you opened these accounts
  • Your credit limits and/or loan amounts
  • Your account balances
  • Your payment history


  • When you apply for credit, you authorize your lender to ask for a copy of your credit report.
  • It contains a list of lenders who have looked at your credit report within the last two years.

Negative Items

  • Any payments you have missed
  • Overdue debt from collection agencies
  • Public record information from state and county courts (i.e. bankruptcies, foreclosures, tax liens, wage garnishments and legal suits or judgments.)

What is NOT in my credit report?

  • Your race, color, religion, national origin, gender and marital status
  • Your age
  • You salary, occupation, title, employer, date(s) of employment and/or employment history
  • Where you live
  • Any interest rate you are currently being charged on credit cards or other accounts
  • Items reported as child/family support obligations or rental agreements
  • Involuntary inquiries that occur when lenders order your report before sending you a pre-approved credit offer in the mail.

Why does my score vary among the three major credit reporting agencies?

  • FICO® scores range from 300 to 850.
  • Fair Isaac tries to make scores as consistent as possible between the three credit reporting agencies, but depending on your lender and which agency they report to, your information with each may be different. This can cause your scores to vary slightly. Most lenders report information to all three agencies.
  • Lenders can review your scores and credit report from any of the three credit reporting agencies, so it’s important to check all three for accuracy.

Each component of your credit report is assigned a percentage based on its importance. It breaks down as follows...

Payment History (35%)

  • Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
  • Presence of adverse public records (bankruptcy, judgments, suits, liens, wage garnishments, etc.), collection items, and/or delinquency (past due items)
  • Severity of delinquency
  • Amount past due on delinquent accounts or collection items
  • Time since delinquent items were paid
  • Number of delinquent items
  • Number of accounts paid as agreed

How to Improve this Part of Your Score

  • Pay your bills on time
  • If you have missed payments, get current and stay current
  • Be aware that paying off a collection or closing an account on which you previously missed a payment will not improve your credit report.
  • If you are having trouble making ends meet, contact your creditors or seek legitimate credit counseling.

Amounts Owed (30%)

  • The amount you owe on all accounts
  • The amount you owe on specific types of accounts
  • Number of accounts in which you are carrying balances
  • How much of your total credit line is being used on credit cards and other “revolving credit” accounts?
  • How much do you still owe on installment loan accounts compared to the original loan?

How to Improve this Part of Your Score

  • Keep your balances on credit cards and other “revolving” accounts low.
  • Pay off your debt rather than moving it around.
  • Don’t close unused credit cards as a strategy for improving your score because it erases important credit history!
  • Remember, the only person who can improve your credit score is you! Avoid companies who claim they can improve your score for a fee.

Length of Credit History (15%)

  • How long have you had credit accounts, in general?
  • How long have you had specific credit accounts?
  • How long has it been since you have used certain accounts?

How to Improve this Part of Your Score

  • Even if you are carrying $0 balances on your credit cards, do not close the accounts. Doing so erases a vital piece of your credit history and can actually lower your credit score.
  • Put credit cards in a safe place where you cannot access them easily.
  • If you have a short credit history, do not open a lot of new accounts too rapidly. This will appear as though you are looking to take on new debt and lower your credit score.

New Credit (10%)

  • How many new accounts do you have?
  • How long has it been since you opened a new account?
  • How many recent requests for credit have you made?
  • What is the length of time between credit inquiries by lenders?
  • Have you been able to re-establish a good payment history following a past payment problem?

How to Improve this Part of Your Score

  • If you are shopping for an auto or home loan, do all of your rate shopping within 30 days.
  • Be careful about opening new accounts you don’t need.
  • Re-establish your credit history if you have had problems in the past.
  • Note that your score is not affected when you request or check your own credit report

Newsletter Signup