Hypothesis of how credit scores are formulated

1. Timeliness of your bill payments (35 percent): Includes late payments, bankruptcies and delinquencies. A 30 days late payment, a collection, a judgment can decrease your score 15-40 points for each entry even if it has been paid and shows paid in full. Catch these before 1 month expires and
   you have a chance of total removal or non-placement.
2. Your outstanding credit (30 percent): Includes the amount of debt you have accumulated on your credit cards as well as how much you owe on installment loans (compared to the original amount of the loans). I've seen credit reports that show no late payments and the credit score will be a low 600. It's because
   there are some accounts that show you owe 80% or more against your high credit limit. My work mate found his score at 621 with no late payments. He moved around some money, reduced his debt to high credit ratio and his score jumped to 706 in less than 3 weeks.
3. The length of time your credit has been active (15 percent): Takes into account how long you have had credit accounts and how often you use them. Most banks look for 3 rated trades, or 3 accounts that have been open for at least 12 months. I've also seen people who have many credit items, but they haven't
   borrowed in 2 years and oops now they have no beacon score at all.
4. The types of credit you have (10 percent): Includes credit cards and loans such as installment loans, mortgages and car loans. Small finance company loans and large numbers of open credit cards can sink a beacon credit score as much as 20-40 points if it looks like a serial get a loan person is on the loose.
5. Any acquisition of new credit (10 percent): Assesses how much credit you have acquired over the length of your credit history. Opening a number of new credit accounts over a short period of time may be detrimental to your score.

Credit Score Ratings

Generally, people with high FICO scores consistently pay their bills on time, keep low or no credit card balances and only apply for new credit accounts as necessary. If your score is not as high as you would like it to be, be sure to review the four score reason codes that accompany your score.
Common score reasons include serious and/or frequent missed payments; multiple accounts with high balances; and bankruptcies, liens, foreclosures or judgments...

Credit Scores
775+ Preferred
725-774 Platinum
724-700 Gold = the average American with no late payments
680-699 Standard 1
640-679 Standard 2 ....80% problem? a few late payments, a collection....
639-620 Standard 3 ....80% problem? a few late payments, a collection....


Here is a car loan rate sheet from a major name 2nd tier credit bank:
Credit Scores
700+ Super Preferred rates in the 7's
660+ Preferred rates in the 8s
659-620 Standard rates in the 11's
619-580 Special rates in the 13's
579-560 Regular rates in the 17's