There is a lot of misinformation about what goes into your credit score.
However, officials at Fair Isaac Corp. -- the creator of FICO scores -- have said many times that this is the heart of what happens: Your credit files – currently those from Equifax and TransUnion – are reviewed. Certain information (roughly 22 items) about how you've managed your credit is statistically analyzed. Ultimately, five different categories are weighted to produce your FICO score.
Here is the breakdown of those five areas that contribute to your FICO score:
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Most Outrageous Bills
Charge for:
Four-Day Car Rental
Total Bill: $871
What Happened: Claude Hite only intended to rent a car for four days, but he went on a camping trip, parked the car in a risky place and watched as it was washed into a ravine by a flash flood. The car sat for 43 days in Olympic National Park, and the charges added up.
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Most Outrageous Bills
From $2,500 for two pizzas to a $40,000 hospital-stay overcharge which included six surgical screws -- at $1,750 each! - we take a look at some of the most outrageous bills ordinary consumers have received.
Click through to see the craziest consumer charges!
Most Outrageous Bills
Charge for: TV license fees
Total bill: Unknown
A man in Germany who died 450 years ago recently received a bill for his television license fees. When the society in his honor explained that he was no longer alive, they got a second bill in the mail.
Read more about this story
Most Outrageous Bills
Charge for: Two Pizzas
Total Bill: $2,500
What Happened: The Heigh family of Alberta, Canada was on vacation in the Philippines when they ordered two pizzas from Pizza Hut. Instead of charging them in the 2,500 in Filipino pesos, they were charged $2,500 in US dollars. MasterCard froze their account and started to investigate. The family eventually recouped the charge for one pizza, but is still fighting the other.
· Read More on This Story
Most Outrageous Bills
Charge for:
Four-Day Car Rental
Total Bill: $871
What Happened: Claude Hite only intended to rent a car for four days, but he went on a camping trip, parked the car in a risky place and watched as it was washed into a ravine by a flash flood. The car sat for 43 days in Olympic National Park, and the charges added up.
· Read More on This Story
Most Outrageous Bills
Charge For:
Hospital Stay
Total Bill: $60,000
What Happened: An investigation by CBS Evening News on hospital overcharges dug into one woman's bill after her back surgery and found that she was overcharged nearly $40,000. Since most hospital bills are not itemized in any way a lay person can understand, the patient portion often goes undisputed, but forensic accountants commonly find many errors and overcharges when they look into individual bills.
· Read More on This Story
Most Outrageous Bills
Charge for:
Water & Sewer Assessment
Total Bill: $17,992
What Happened: In a secluded neighborhood near Fort Myers, Fla., the utilities company wanted to charge property owners assessment for installing water, sewer and irrigation lines back in 2006. The resident complained to the local paper and filed lawsuits, which stalled the project.
· Read More on This Story
Most Outrageous Bills
Charge for: Cell Phone Internet Service
Total Bill: $85,000 for two months of service
What Happened: A 22-year-old Canadian student thought he was on a $10 unlimited mobile browsing plan for his phone, which he proceeded to use as a modem for his computer, but the charges accumulated because of the unauthorized usage. The company eventually reduced his bill to $3,243.
· Read More on This Story
Most Outrageous Bills
Charge for: iPhone International Roaming
Total Bill: $2,100
What Happened: The debut of the iPhone was a bit bumpy for some. There were complaints about 300-plus page bills that played cheekily on YouTube. And then there were tales of outrageous roaming charges. Even the tech-savvy got caught short, like Wired editor-in-chief Chris Anderson, who blogged about his $2,100 bill.
· Read More on This Story
Most Outrageous Bills
More From AOL:
Cheapest Person I Know
Now that you've seen some outrageous bills that average consumers have received, see our roundup of outrageous ways people pinch pennies. AOL users spilled the beans on the cheapest people in their lives. See what crazy things they do to save some coin.
Next Gallery: He's So Cheap He ...
Most Outrageous Bills
The Formula That Governs Your FICO Score
1. Payment History: Approximately 35% of your score is based on this category.
2. Amounts Owed: About 30% of your score is based on this category. (Mainly, you're evaluated based on how much credit card debt you have).
3. Length of Credit History: Roughly 15% of your score is based on this category.
4. New Credit or Inquiries: Around 10% of your score is based on this category.
5. Types of Credit in Use: About 10% of your credit score is based on this category. (Having a good mix of credit in your credit files is viewed favorably, although some forms of debt, such as mortgage debt, is scored more positively than other forms of debt, like department-store cards or furniture-store cards).
Based on this information, as well as other advice FICO freely disseminates on its Web site (
www.myfico.com) and elsewhere, you can draw some good general conclusions about what actions can help your credit – and what could hurt it. For example, to increase your credit scores:
Pay Your Bills on Time
* Payment track record is the largest component of your FICO score.
* Even if you must make "minimum" payments, do it!
* One late payment can drop your FICO score by 60 to 110 points.
Maintain Low Credit Card Balances
* Don't "max out" any cards.
* Try to not to use up too much of your available credit limit.
* Spread out debt over several cards instead of carrying big balances.
Keep Your Older, Established Accounts Open
* Longer credit history is scored favorably.
* Resist the urge to close an account when you pay it off.
* Closing accounts can sometimes lower your FICO credit scores.
Remember these facts the next time you're tempted to do something that might damage your credit rating.
Lynnette Khalfani-Cox, an award-winning financial news journalist and former Wall Street Journal reporter for CNBC, has also been featured in top newspapers including the Washington Post, USA Today, and the New York Times, as well as magazines ranging from Essence and Redbook to Black Enterprise and Smart Money. Check out her New York Times best seller
'Zero Debt: The Ultimate Guide to Financial Freedom.'
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