Montana credit repair consultant and personal finance coach, Richard Kramer, reveals the truth behind the three-digit numbers that determine your financial life.

Ruining Your Score is Easy. Improving it is a Full-time Job

Missed or late payments count for 35 percent of your FICO score. Richard Kramer has 37 years of experience in credit repair to back his statements. For instance, a borrower with a score of 780 can see their score tumble by up to 110 points if they miss a single payment. Someone with a 680 score can see a drop of up to 40 points for missing a single payment. People with the highest credit scores are penalized the most for a missed or late payment.

All Debts are not Equal

Paying off a $250,000 mortgage may not even boost your score by 10 points but wiping out your credit card balances can boost your score by more than 100 points. The reason, says Richard Kramer, is a statistical observation. Paying off a loan completely has a small statistical value when predicting credit default risk. In the same way, not paying your monthly bills on time can be devastating to your credit scores.

You May Not Know Your True FICO Score

It is unlikely that you will ever know the exact score your lender sees when you apply for credit. At the time of writing this, more than 60 FICO scores are available, some assigning more weight to certain characteristics. For instance, some scoring models care about your credit card activity while others may restrict themselves to your history with car loans. The latter is of more use to a car loan company than the former. Ditto with other scores. Each of them happens to be popular in one or multiple industries. The FICO score that you see is a simple average which may be greater than or less than the score your mortgage or car loan lender sees.