Climb Your Way to Become a FICO Score High Achiever - infographic

mountain climber

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Climb Your Way to Become a FICO Score High Achiever

Using the analogy of climbing a mountain to represent the steady work involved to understand one's FICO Score, we see a climber on the left side of a mountain and a climber on the right. On the left represents a consumer with a FICO Score below 635 and is working at improving her credit standing; she's called the Improver. The climber on the right represents a consumer with a FICO Score greater than 795 and maintains responsible credit behaviors; she's called the High Achiever. These scores are based on FICO Score 8. Down the middle of the mountain indicates four levels, each one representing financial behaviors that correspond to key factors having the greatest impact on a consumer's FICO Score.

The first level at the bottom of the mountain represents paying on time. The Improver (left side) will have late payments. Only 7% of those with a FICO Score below 635 will pay their bills on time every month, and 64% of Improvers have amounts past due at any given time. On the right, 96% of High Achievers pay on time, with less than 1% having amounts past due. This is important because payment history makes up 35% of the FICO Score.

Moving up to the second level of the mountain, Utilization refers to the amount of available credit. Improvers have about 15% available credit, with many maxing out their available credit, compared to High Achievers, who only use about 7% of available credit. In the analogy of a mountain climber, the Improver holds an empty water bottle, while the High Achiever has a firm grasp on a rope and a nearly full water bottle. It is important to keep credit utilization low for a healthy FICO Score.

Average Balance Carried on Credit Cards is the third level of the mountain. High Achievers owe less than $4000 on their credit cards, whereas Improvers owe over $6000 on average. When you picture the mountain climbers, the improver falters, while the High Achiever makes steady progress with the support of a sturdy rope. The overall message is to keep revolving balances low.

The fourth level up the mountain – near the top - represents Account History or the age of the oldest account. The average age of credit accounts for Improvers is approximately 6 years old and the average Improver's oldest account was opened 12 years ago. Here, our mountain climber is struggling to climb with a short rope to the top. The High Achievers have an average age of 12 years and the average oldest account is 27 years. Open new credit accounts only when necessary.

At the top of the mountain is a happy climber holding her flag with a score of 800, demonstrating her steady and responsible work has paid off.