In Callaway The FICO Score is Important
Here are the Best Ways to Improve Your Credit Report FICO Score
In Callaway, Florida some of probably the most typical discussions among friends would be connected to credit report. The reason behind this is due to the fact that the score achieved by any person would substantially affect the amount of mortgage, car loans and many other financial services.
Simply put, a credit score is like a report card from Callaway High School (I know, we have all been through that) where you would get a reprimand for a poor performance and get a reward for a good performance.
Unlike what lots of folks in Callaway believe, there is not a single, universal way of classifying credit rating where the last time you took an extra nickel from the cashier would be recorded on your credit report.
There is though, a widely used popular credit score in the United States, 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 consumer banking and mortgage brokers in Callaway.
Before engaging in the discussion on how FICO rating may be increased, it is worthy to have an outline on what your 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 application for credit and/or amount of credit obtained recently.
The first step to improving a FICO rating is to get a copy of your credit report. This can be attained from Equifax, TransUnion or Experian.
Then, prepare yourself for the agony (or joy if you are a bookkeeper) 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 because it can take up to months to get a proper correction.
Secondly, if you have serious Credit card debt where the majority of your card balances are near the credit line, it’s best if you pay them off as soon as possible. If you need help paying off debt, call for help at 844-CARE-866.
The banks and lenders prefer a significant gap between a credit card balance and the credit limit, approximately a ratio of 40% between balance/limit. Paying off maxed out 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 on time. 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 each time.
The punctuality of your payment takes up 35% of your score and it is vital 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 keep 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 five years as compared to an average rating with a credit history of 30 years, the person with the longer credit history would possibly obtain a larger loan or a lower interest rate.
Altogether, it’s a not rocket science when it comes to raising your FICO score. All it takes is for you to decrease your total debt, pay your bills on time and keep track of where you are heading in your spending, mortgage and loans.
There are professionals at 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 Callaway, Florida you can call toll free 844-207-3818 in order to get started increasing your FICO score and fixing your credit report.