credit cards

FICO points revealed

Monday, Nov. 30
Posted 2 p.m.

Everyone has wondered how much damage maxing out a credit card or opening a new card does to their credit scores. Well, personal finance columnist Liz Pulliam Weston has found out. She asked FICO, the company that created the credit score, to explain what happens when someone does one of five common things. FICO provided their points deductions for 680 and 780 scores. Here's what they told her:

Credit score deductions
 Effect on a 680 scoreEffect on a 780 score
Maxed-out card-10 to -30-25 to -45
30-day late payment-60 to -80-90 to -110
Debt Settlement-45 to -65-105 to -125
Foreclosure-85 to -105-140 to -160
Bankruptcy-130 to -150-220 to -240
Source: FICO

You can see that bad behavior really kills a good credit score. Since credit scores reflect you as a credit risk, all of these behaviors for a good scorer could be signs of trouble to FICO.

Also, each individual's credit profile will be affected differently depending on how many credit cards, loans, etc., they have.

If you want to estimate your FICO score, Bankrate offers this tool. This time of year, with department stores offering discounts for opening a new card, it's tempting to take advantage of it. But that new card will also cost you points. Think twice about it -- that 10 percent discount today could cost you much more if your FICO score decreases.

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