In Murray The FICO Score is Important
Here are the Best Ways to Improve Your Credit Report FICO Score
In Murray, Idaho some of the best common discussions among people would be related to credit rating. The main reason for this is because the score achieved by any person would significantly influence the amount of home mortgage, loan rates and many other financial costs.
To put it simply, a credit history is similar to a report card from Murray 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 many individuals in Murray believe, there is not a single, universal way of ranking credit score where the last time you took an extra 5 cents from the cashier would be recorded on your credit history.
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 accepted tool by most Murray banking and in the credit industry in Murray.
Before going into the discussion on how FICO rating could be boosted, it is worthy to have a rough idea on what your FICO rating is based.
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 initial step to improving a FICO rating is to obtain a copy of your personal credit report. This can be attained from Equifax, TransUnion or Experian.
Next, brace yourself for the agony (or delight if you’re an accountant) of going through all the numbers and ensuring everything adds up to the best of your knowledge.
The reason is because if something is wrong in your report, it’s best to get them corrected because it can take up to several months to get a correction.
Secondly, if you have serious Credit card debt where many of your credit card balances are close to the credit limit, 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.
Subsequently, 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 important to know that paying your debt on schedule NOW is outweighed by the fact that you paid your debt in a timely manner 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 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.
Overall, it’s a not nuclear physics when it concerns raising your FICO score. All it takes is for you to reduce your credit card debt, pay your bills in a timely manner 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 Murray, Idaho you can call toll free 844-207-3818 in order to get started increasing your credit score and fixing your credit report.