Bulk Up Your Credit

02/23/2009 05:12 am ET | Updated Nov 17, 2011

On the Weight Watcher diet program the fewer points you rack up the better. Not so on your FICO score where the objective is to gain as many points as possible. 300 here is way too puny and 850 is as fat and robust as you can get.

However, getting there may not be half as much fun as trying to max out your points for food. To plump up your credit profile, you'll have to exercise judgment on where and how to change your image for lenders. Just like the food pyramid, some building blocks are bigger and more important than others. If you're smart, you'll play the percentages.

You can count on the fact that 35% of your FICO score is determined by whether you pay your bills on time or not, and if not to what extent you're late. Barry Paperno of the Fair Isaac Corporation, which gave us the FICO score, says, "There's a pecking order here and you should know it." In order of importance, your payment history will be judged on how recent was your most recent late payment, how late was it, and how many late payments do you have. In fact, he says " a 30-day late payment just last month will do slightly more damage to your score than a 90-day late payment two years ago."

The next 30% of your score is based on the amount you owe relative to your available credit. This is commonly called your "credit utilization ratio" and you want a low use on a high limit. For example, if you have a credit limit of $10,000, you want to show a balance due of around $3,500 or roughly one-third of the cap. Gail Cunningham of the non-profit National Foundation for Credit Counseling says, " It sounds contrary to common sense, but, you may want to spread large purchases around on several cards to keep your credit utilization low."

The next 15% of your score depends on the length of your credit history. The longer and healthier the better, so don't do yourself a disservice by closing out an account you haven't used in a long time. In fact, every now and then charge on a card you haven't used in a long time just so the issuer doesn't close the account. That would make you look bad in two ways. It would shorten your credit history and show that the account was closed on you.

The fourth category is worth 10% and for that matter so is the fifth. In the fourth new accounts are at issue. The questions are how new and how many? If you're planning on applying for a car loan or a mortgage, it is not the time to also open a new credit card account, even if you have an excellent credit record. When you apply for new credit, inquiries are made to the credit reporting services and that can ripple the waters just at a time you don't want to make any waves.


The fifth category is a reflection of what types of credit you have and here more is better.
The scorekeepers like to see both revolving and installment credit histories. Take this to mean have three to five credit cards with low "credit utilization ratios" and a car or student or home improvement loan.

If you play these percentages you can raise your score, but don't expect it to happen overnight. Gail Cunningham says, "That's frequently a mistake people make and that's why it's important to check your credit scores periodically." Remember you're legally entitled to check your credit reports for free once a year and you can do so at Don't be fooled by look alike sites that may charge you. You can stretch that free peek by looking up just one of the three major reporting services every four months. That's not cheating. It's just like saving up all those diet points for one delicious donut.

And when you're in New York and lookin' for a great cup of hot chocolate, go here.