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FICO Introduces 2011 FICO Fitness Challenge

By Eva Norlyk Smith, Ph.D.
February 8, 2011

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FICO, the company behind the FICO credit scoring model, recently introduced the 2011 FICO Fitness Challenge. The challenge encourages credit cardholders to improve their FICO scores by the end of the New Year and share their progress along the way.

According to the Consumer Federation of America, Americans could save as much as $28 billion a year in credit card finance charges by improving their credit score by a mere 30 points. The FICO Fitness Challenge on, in turn, encourages consumers to get their credit into shape by the end of 2011 so that they can later save money on loan products ranging from credit cards to mortgages and car loans.

FICO’s fitness challenge participants are encouraged to enter their current credit score and their credit score target online and then use the Web site’s Credit Education Center and advice from the FICO community forum to learn how to boost their score. Participants update other users on their progress throughout the year and share specific actions that helped them become financially fit for the New Year. The FICO Fitness Challenge of 2011 is a repeat of a similar challenge from 2010, which received more than 65,000 page views.

So, does it work? According to data from 2010, most challenge participants were able to raise their scores by making a few simple changes to their credit habits. For users who already had good or excellent credit, the main tactic for improving credit scores was to pay down their credit card balances in order to reduce their overall credit utilization ratio – which measures how much a debtor still owes and how much credit they have left. A low credit utilization ratio can make a big difference to your score.

Users with poor credit, on the other hand, had to apply a multi-pronged approach to their score-boosting plan and spruce up a number of bad habits. One forum user with poor credit increased her FICO score from 427 to 579 in five months, but she had to take a number of steps to do it. For example, in order to boost her score, she:
• paid all her bills on time and pared down her credit utilization ratio by paying off as much debt as she could,
• checked her credit report and wrote to the credit reporting bureaus to get errors removed from her report and
• requested debt verification from collection agencies – which, for some people, can lead to the removal of blemishes from a credit report if the debt cannot be verified.

So, what are some of the most successful strategies used by FICO Fitness Challenge participants to improve their credit scores? Here are some of the participants’ main do’s and don’ts for improving FICO scores:


1. Pay your bills on time. Delinquent payments will lower your credit score more than anything else. If you have missed payments on your credit cards or other bills in the past, get current and stay current. Once you begin paying on time regularly, your credit score will improve in as little as six months.

2. Keep your credit utilization ratio low by keeping your credit card balances below 10 percent across all credit cards.

3. Take out several different types of loans, including credit card loans, car loans and preferably a mortgage. Then manage them responsibly.


1. Don’t just move around your debt by taking out new credit cards or other types of revolving credit. Pay it off instead.

2. Don’t apply for new credit cards or other credit accounts unless you really need them or you want to increase your total available credit. If you are shopping around for the best loan terms or credit card terms, it’s OK to apply to several different places for a single loan within a short period of time. However, don’t apply for many different types of credit at the same time.

3. Don’t close unused credit card accounts. It will lower your total available credit and potentially affect your credit utilization ratio. It could also shorten the length of your credit history, dragging down your score.

4. Don’t ignore your credit report. Pull it once a year to check for errors and for accounts you don’t recognize. If you see an unfamiliar account, this could be a sign of identity theft. If you find something wrong on your report, follow up with the credit bureaus right away so that they can fix it immediately.




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