The firm Fair Isaac Corp. developed a computer model to aid the three main credit bureaus Equifax, Experian, and Trans Union. The model uses a scoring method depending up on your credit information such as credit history, current credit, credit balance, and credit applied for. This information is then compared to the thousands of other customers to give you a FICO score.

The breakdown of the calculation is past payment history worth 35 percent, outstanding debt is 30 percent, length of credit for 15 percent, new credit for 10 percent, and type of credit is 10 per cent.

All this information is time sensitive. In other words, the score is calculated at the time of request. Therefore, the score is based on what is recent. It will evaluate any delinquencies and bankruptcies in the past, but it will also assess how many late payments you have on the date of request.

Similarly, if the amount of credit utilized by you today is 75 per cent of your total available credit your FICO score is likely to go down as against a person, who is only utilizing only 25 per cent of his or her available credit.

Also note that during the calculation of such FICO score, all other personal information is kept secret. The score is not evaluated on the basis of sex, race, religion, or your marital status.

If you are aware that you may apply for credit sometime soon, it would be advisable to improve your credit status. However, note that this quick fix can only deal with current credit issues and not the ones which have been present there for years. The best step you can take is pay off your credit cards and any other outstanding bills. This will reduce your balance owed and result in a higher FICO score.