In Spanish Camp FICO Score is Important
Here are the Best Ways to Improve Your Credit Report FICO Score
In Spanish Camp, Texas one of probably the most common discussions amongst friends would be connected to credit reports. The main reason behind this is due to the fact that the score achieved by any consumer would significantly impact the amount of mortgage, loan rates and many other financial related services.
To put it simply, a credit history is similar to a report card from Spanish Camp High School (I know, we have all been through that) where you would get a reprimand for a low grade and a reward for a good grade.
In contrast to what lots of people in Spanish Camp believe, there is not one universal way of categorizing credit history where the last time you took an extra nickel from the cashier would be recorded on your credit history.
There is, 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 embraced tool by most consumer banking and mortgage companies in Spanish Camp.
Before engaging in the discussion on how FICO rating might be boosted, it is worthy to have an outline on what your FICO rating is based upon.
, 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 very first step to improving a FICO rating is to get a copy of your personal credit report. This can be attained from Equifax, TransUnion or Experian.
Next, brace yourself for the torment (or joy if you are a bookkeeper) of examining all the numbers and ensuring everything adds up to the best of your knowledge.
The main reason is if something is incorrect in your credit report, it’s best to get them corrected immediately because it can take up to several months in order to get a proper correction.
Next, 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 asap. If you need help paying off debt, contact OperationCare.com for financial coaching. Call them at 844-207-3818.
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 high balance 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 desire impact on your FICO score if you do not pay your debt on schedule and each 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 in a timely manner 3 years ago.
It is always important to keep your oldest account. Because 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 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 qualify for a larger loan or a lower interest rate.
Altogether, it’s a not rocket science when it pertains to raising your FICO score. All it takes is for you to reduce your total debt, pay your bills on time and keep an eye on where you are heading in your spending, mortgage and loans.
There are specialists at Credit Repair can help you better understand your credit report. Enroll in one of their coaching programs to improve your score.
Even if you don’t live in Spanish Camp, Texas you can call toll free 844-207-3818 in order to get started increasing your FICO score and fixing your credit report.