Description: The article shows us the importance of credit wise FICO score which is also known as credit score that helps lenders determine what interest rate to give to the insurers by using it.
How important is your FICO score? If you’re buying a house or car getting insurance or even applying for a job, it can be critical, your FICO score is also known as your credit score which helps lenders determine what interest rate to give you and many insurers use it to determine your premiums.
A low score can even prevent you from renting the apartment you want, it makes you ineligible for certain jobs, surprisingly with so much riding on this number, very few people understand how the FICO score is calculated, what the score means or what they can do to improve their scores.
The first is to evaluate your score, the point system uses technically ranges from 0 to 999, but all actual scores fall between 3:30 and 850 332 619, this is poor credit in banker terminology, a person with a score in this range is considered to be a credit Lepper 622 659 subprime financing will be available to you 660 to 720 prime financing will be available to you 721 to 750 prime interest rates may be available to you.
You may be able to get interest rates on loans that are even lower than the prime rate and finally 751 or above this is excellent credit, this score may enable you to get even lower prime interest rates, depending on the credit type, you’re utilizing next understanding, what affects your credit, the exact calculation of the FICO score is kept secret as proprietary informatio.
There are some general guidelines, that can apply 35 percent of your credit score which is based on your consistent payment history and only includes payments later than 30 days past due 30 percent is based on the percentage of your credit capacity being used.
That is the ratio of current credit debt in comparison to total available credit or revolving credit, if you carry very low balances on credit cards, your score will be higher, ,if all your cards are nearly maxed, fifteen percent of your score is determined by the length of your credit history, ten percent is based on the types of credit you have.
Ten percent is based on recent searches for credit and the amount of credit you’ve recently obtained, every time you apply for a credit, it affects your credit score negatively, here are some steps, that can help you to increase your credit score.
The first is disputing errors and inaccuracies, according to recent reports, as many as 75 percent of consumer credit files contain inaccurate items, these inaccuracies, especially ones that are harmful to your credit scores can lead to higher interest rates on loans and credit cards or denials for new credit.
After you’ve obtained a copy of your credit reports, you must review them carefully to identify any items that are negatively impacting your credit score, highlight everything you believe to be incomplete, incorrect, inaccurate, untimely questionable errors and finally anything outdated.
As a consumer, you have the right to dispute any information on your credit reports that you believe is inaccurate untimely or incomplete, if the creditor is unable. unwilling or unavailable to verify a credit item, it must be removed from your credit report, step 2 make payments on time, step 3 pay down debt, step 4 make sure proper credit lines are posted on your credit reports, five people positive accounts open six have at least four revolving credit lines and your credit report.
If you have poor credit and are not approved for a typical credit card, you might want to set up a secured credit card account, a secured credit card requires you to make a deposit that is equal to or more than your limit and finally use caution when applying for new credit.
You don’t want to have your reports showing that you are constantly looking for credit, you don’t want to open credit accounts, you don’t intend to use your credit score generated from your credit report that is the critical information used by lenders such as credit card companies and other lenders to determine your individual credit risk.