In Strattanville The FICO Score is Important
Here are the Best Ways to Improve Your Credit Report FICO Score
In Strattanville, Pennsylvania among the best popular discussions between people is related to credit report. The main reason behind this is due to the fact that the score achieved by any individual would significantly impact the amount of mortgage interest, loan rates and many other financial related costs.
Simply put, a credit report is similar to a report card from Strattanville High School (I know, we’ve all been through that) where you would get a punishment for a poor performance and get a reward for a high score.
In contrast to what many people in Strattanville believe, there is no one 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 well known credit score in the U.S., 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 consumer banking and mortgage companies in Strattanville.
Before getting involved with the discussion on how FICO rating could be boosted, it is worthy to have an idea 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 in the past
- 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% – varieties 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 acquire a copy of your personal credit report. This can be attained from Equifax, TransUnion and Experian.
Next, prepare yourself for the pain (or joy if you’re a bookkeeper) of examining all the numbers and being sure everything adds up to the best of your understanding.
The reason is because if something is wrong in your credit history, it’s best to get them corrected immediately because it can take up to months in order to get a correction.
If you have serious charge card debt where most of your 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 large 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 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 time and each time.
The punctuality of your payment takes up 35% of your score and it is very important to know that paying your debt on schedule 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.
For instance, even if you score a relatively high score, if you credit history is just a few years when 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 comes to raising your FICO score. All it takes is for you to lower your total debt, pay your bills on time and keep track of where you are heading in your spending, mortgage and loans.
The experts at Cambridge 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 Strattanville, Pennsylvania you can call toll free 844-207-3818 in order to get started increasing your credit history and fixing your credit report.