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My friends have always asked me how I have been able to maintain my credit score. I always tell them that the steps are simple, as long as they make sure that they do it the right way. I start off by telling them that their credit rating is calculated based on the standards of FICO or Fair Isaac Corporation. Then, I advise them that they should learn more about these standards so that they will know which factors influence their rating. I tell them that there are five categories within the FICO standards, which are used to calculate my credit score. These are: 1. The history of my monthly payments - I further relay to my friends that they should keep up with their payments each month. This way, they will be able to avoid a bad history of credit. 2. My credit balance - this is taken into account along with the limit of my credit account. If there is a huge difference between my loan balance and my credit limit, the higher the percentage for this category. 3. The duration of my credit history - the longer I have been able to maintain a good record history |
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