No one knows the exact algorithm behind the FICO scoring system. However, they provide the guidelines based on which your FICO scores could be influenced.
While FICO doesn’t uncover its scoring recipe, it gives valuable rules about the elements that matter for scores.
Generally, paying your debts on time and keeping your credits lines below a certain level will help you keep a healthy FICO score.
Repayment history: Always make sure all your payments on the debts are on or before the due date to keep your FICO scores above par.
Failing to miss your payment or any accounts being in collects can really have a huge negative impact on your scores.
Utilization of your credit: This is the amount of accessible credit you are utilizing.
If you are maxing out your credit cards every month, your credit score could have a negative impact. Less utilization of the credit limit will have better chances of improving your FICO credit score.
Period of credit: This alludes to how long you’ve had credit and the normal age of your credit accounts.
Late applications for credit (10%): When you apply for a loan or credit card the lender or the credit card company will have a hard credit check done.
Applying for the loan or credit cards regularly would also have a negative impact on your FICO scores, as every time you apply there would be a hard inquiry on credit and your scores are dropped by a few points after every hard check.