Improving Your Credit Scores

To improve your credit scores, you will need to focus on your credit report.  Why?  Most credit scoring models use information from your credit reports to generate your scores.  Improve the information in your credit reports and your credit scores will improve.

If improving your credit score is important to you, the strategies in this worksheet will help you.

You should also be aware that FICO has made some important changes in terms of how much some potentially negative items factor into your scores.

• FICO 8 is more forgiving for isolated late payments—if you are late with a bill one time on an account you have historically always paid on time.  If you are habitually late, your credit score will be more negatively affected under FICO 8.
• This version also minimizes the affect of trade line renting—when someone pays to be an authorized user on a stranger’s account to build their credit history.
• This scoring model ignores small-dollar collection accounts where the original balance was less than $100.

• FICO 9 does not negatively rank paid collection accounts in your score.  So paying off an account in collection will benefit your score.
• Medical bills in collections will not affect scores as negatively as they have in the past.  Getting on a payment plan with a medical provider for bills that you do owe could keep them from ending up in the collections section.