In Cherry Point Your FICO Score is Important
Here are the Best Ways to Improve Your Credit Report FICO Score
In Cherry Point, North Carolina some of the best frequent discussions between people could be related to credit scoring. The reason behind this is due to the fact that the score achieved by any consumer would substantially influence the amount of mortgage, loan rates and many other financial related services.
To put it simply, a credit score is like a report card from Cherry Point High School (I know, we’ve all been through that) where you would get a reprimand for a poor performance or get a reward for a good performance.
Contrary to what lots of folks in Cherry Point believe, there is not a single, universal way of categorizing credit history where the last time you took an extra 5 cents from the cashier would be recorded on your credit report.
There is though, a widely used well known credit score in the USA, 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 used tool by most national banking and mortgage companies in Cherry Point.
Before going into the discussion on how FICO rating may be increased, it important to have a rough idea on what FICO rating is based on.
Simply speaking, FICO rating is separated into a few statistical components where these components are made up from:
- 35% – punctuality of payment historically
- 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% – types 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 obtain a copy of your own credit report. This can be attained from Equifax, TransUnion or Experian.
Then, prepare yourself for the pain (or joy if you are an accounting professional) of examining all the numbers and being sure everything adds up to the best of your understanding.
The main reason is because if something is wrong in the report, it’s best to get it corrected immediately because it can take up to months in order to get a proper correction.
If you have serious charge card debt where most of your credit card balances are close to the credit line, it’s best if you pay them off immediately. If you need help paying off debt, contact www.OperationCare.com 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.
Subsequently, it is equally important for you to pay off your debt promptly. Even if you have the ability to pay off your debt, it would not have the impact you want on your FICO score if you do not pay your debt on time and every time.
The punctuality of your payment affects 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 schedule 3 years ago.
It is always important to maintain your longest standing 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 actually is.
Even if you score a relatively high score, if your credit history is just a few 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 annual interest rate.
Overall, it’s a not rocket science when it pertains to raising your FICO score. All it takes is for you to lower your total debt, pay your bills on schedule and keep track of where you are heading in your spending, mortgage and loans.
The professionals at Cambridge Credit Repair can help you better understand your credit score. Enroll in one of their coaching programs to improve your score.
Even if you don’t live in Cherry Point, North Carolina you can call toll free 844-207-3818 to get started increasing your FICO score and fixing your credit report.