In Creighton Your FICO Score is Important
Here are the Best Ways to Improve Your Credit Report FICO Score
In Creighton, Missouri one of probably the most popular discussions with friends would be connected to credit history. The reason behind this is because the score achieved by any person would significantly influence the amount of mortgage, car loans and many other financial costs.
To put it simply, a credit score compares to a report card from Creighton High School (I know, we have all been through that) where you would get a reprimand for a poor performance and a reward for a good grade.
In contrast to what lots of folks in Creighton believe, there is not one universal way of ranking credit score where the last time you took an extra 5 pennies from the cashier would be recorded on your credit report.
There is, a widely used popular credit score in the U.S., known as FICO or Fair Isaac Corporation. FICO score basically indicates the likelihood of a person to default on a loan and this is a commonly embraced tool by most banking and mortgage companies in Creighton.
Before getting involved with the discussion on how FICO rating may be improved, it valuable to have a rough idea on what FICO rating is based on.
Basically, FICO rating is separated into a few statistical components where these components are made up from:
- 35% – punctuality of payment in the past
- 30% – the amount of debt, expressed as the ratio of current revolving debt (credit card balances and others) to total available revolving credit (credit limits).
- 15% – length of credit history.
- 10% – kinds of credit used (installment, revolving or consumer finance).
- 10% – recent search for credit and/or amount of credit obtained recently.
The initial step to improving a FICO rating is to acquire a copy of your credit report. This can be attained from Equifax, TransUnion or Experian.
Then, brace yourself for the agony (or joy if you are an accountant) of going through all the numbers and making sure everything adds up to the best of your recollection.
The main reason is if something is incorrect in your credit history, it’s best to get them corrected immediately because it can take up to several months in order to get a update entered.
If you have serious credit card debt where the majority of your credit card balances are close to the credit line, it’s best if you pay them off as soon as possible. If you need help paying off debt, contact Operation Care for financial coaching. Call them at 844-207-3818.
The banks and lenders prefer a large gap between a credit card balance and the credit limit, approximately a ratio of 40% between balance/limit. Paying off any excess credit card debt would definitely increase the FICO score as it impacts 30% of the FICO score.
Next, it is equally important for you to pay off your debt promptly. Even if you manage to pay off your debt, it would not have the desire impact on your FICO score if you do not pay your debt on time and every time.
The punctuality of your payment impacts 35% of your score and it is very important to know that paying your debt on time NOW is outweighed by the fact that you paid your debt on time 3 years ago.
It is always important to maintain your oldest account. the longer you have your financial history established; the easier it is for the creditors or banks to know how reliable your FICO score is.
Even if you score a relatively high score, if your credit history is just 5 years as compared to an average rating with a credit history of 30 years, the person with the longer credit history would possibly receive a larger loan or a lower interest rate.
Altogether, it’s a not nuclear physics when it pertains to raising your FICO score. All it takes is for you to reduce your credit card debt, pay your bills on schedule and keep an eye on where you are heading in your spending, mortgage and loans.
The professionals at Cambridge Credit Repair can help you better understand your FICO score. Enroll in one of their coaching programs to improve your score.
Even if you don’t live in Creighton, Missouri you can call toll free 844-207-3818 in order to get started increasing your credit score and fixing your credit report.