In Lyn May The FICO Score is Important
Here are the Best Ways to Improve Your Credit Report FICO Score
In Lyn May, Ohio some of probably the most popular discussions among friends could be connected to credit scoring. The main reason behind this is because the score achieved by any individual would greatly influence the amount of mortgage, loan rates and many other financial costs.
To put it simply, a credit score is similar to a report card from Lyn May High School (I know, we have all been through that) where you would get a reprimand for a poor performance but rewarded for a good performance.
In contrast to what lots of people in Lyn May believe, there is not a single, universal way of categorizing credit report where the last time you took an extra dime from the cashier would be recorded on your credit report.
There is though, a widely used popular credit score in the USA, commonly 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 utilized tool by most consumer banking and loan brokers in Lyn May.
Before engaging in the discussion on how FICO rating may be boosted, it handy to have a rough idea on what your 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 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 very first 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, brace yourself for the distress (or pleasure if you’re an accountant) of examining all the numbers and making sure everything adds up to the best of your knowledge.
The main reason is if something is incorrect in your report, it’s best to get all of them corrected immediately because it can take up to several months to get a update entered.
Next, if you have serious credit Card debt where many of your credit card balances are close to the maximum, it’s best if you pay them off as soon as you can. If you need help paying off debt, call for help at 844-CARE-866.
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 high balance credit card debt would definitely increase the FICO score as it impacts 30% of the FICO score.
Afterward, it is equally important for you to pay off your debt on schedule. 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 month.
The punctuality of your payment takes up 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 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 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 receive a larger loan or a lower interest rate.
In conclusion, it’s a not rocket science when it pertains to raising your FICO score. All it takes is for you to decrease your credit card debt, pay your bills on schedule and monitor where you are heading in your spending, mortgage and loans.
There are experts at Credit Repair can help you better understand your credit history. Enroll in one of their coaching programs to improve your score.
Even if you don’t live in Lyn May, Ohio you can call toll free 844-207-3818 to get started increasing your credit history and fixing your credit report.