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How FICO Score is Calculated

There are five factors that are used to calculate your FICO credit score. Once you understand the factors that affect your FICO credit score you will realize how seasoned (authorized) tradelines can be used to increase FICO credit scores.

PAYMENT HISTORY

1. Payment history (paying your bills on time, which means within 30 days after the due date of your payment) represents 35% of your FICO credit score.

If your FICO credit has taken a hit because of missed payments then buying several of our seasoned tradelines with perfect payment history you will be able to boost your credit scores.

OUTSTANDING DEBT BALANCE

2. The outstanding debt of your tradelines (the amount of your credit limit in use,  preferably under 30%) represents 30% of your FICO credit score. For example, If you have a tradeline with a credit limit of $10,000.00, you should not charge more than $3,000.00 if you want your credit scores to remain high.

If your credit utilization level is high, for example, 60% then it would be easier to boost your FICO credit score by buying one or more tradelines with low balances to reduce your utilization rate below 30%.

AGE OF TRADELINE

3. The age (how long you have had a tradeline) of your credit represents 15% your FICO credit score.

If your tradelines are young one way to boost your FICO credit score is to buy older tradelines.

NEW CREDIT

4. New credit (tradelines that are open less than a year) represents 5% your FICO credit score.

DIVERSE TRADELINES

5. Having different types of credit (credit card, car loan, mortgage, student loan) represents 5% of your FICO credit score.

As you have just found out 95% of the factors used to calculate FICO credit score can be influenced by buying seasoned (authorized) tradelines to improve your payment history, utilization rate, or age of credit. Sometimes all three factors can be accomplished with one tradeline.

Buying Tradelines or Secured Credit Card

So, why would someone buy tradelines rather than secured credit card? Credit scores determine – based on what’s in your report – the likelihood you will repay a loan. So, for example, when you get a loan and pay it back, you’re getting “credit” for doing so. And, new lenders will see that and say “He did it before, maybe he’ll pay back my loan, too.” Then, over the years, your credit report gets really complicated and scoring models, like FICO, spit out a numerical representation of your credit risk, based on the things in your report.

The thing that has the largest impact on your credit score? Revolving credit cards, the authorized user slots we sell you.
Things that have the least (if any) impact on your credit score? Secured credit cards.

Why?

You’re showing zero (literally zero… it’s secured by your own money with zero risks of default) risk. No risk, no evaluation of credit risk. No evaluation of credit risk, no “credit” toward your repayment behavior. No “credit” toward your repayment behavior, no increase in credit score.

Here’s another reason: Unless you have $10,000.00 in cash laying around, you’re likely going to get a small secured credit card; you will be told by your back to open a $300.00 account “just to have something.” This is shooting yourself in the foot… you will have placed yourself in “adolescent” scorecards and likely making your credit score worse than before you had it.

In my opinion, the only circumstances you should have a secured credit card is if you’re very young and/or have no credit at all, because – in most circumstances – you will need at least one primary account to obtain funding (regardless of how high your score goes after adding authorized users).

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