Jan 212017
 

In Elkins FICO Score is Important

Here are the Best Ways to Improve Your Credit Report FICO Score

In Elkins, New Mexico some of the most frequent discussions amongst friends would be related to credit reports. The reason behind this is due to the fact that the score achieved by any individual would significantly affect the amount of mortgage interest, loan rates and many other financial related services.

Simply put, a credit report compares to a report card from Elkins High School (I know, we’ve all been through that) where you would get a punishment for a low grade and a reward for a high score.

Unlike what lots of folks in Elkins believe, there is no one universal way of categorizing credit rating where the last time you took an extra 5 pennies 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 adopted tool by most Elkins banking and loan companies in Elkins.

Before engaging in the discussion on how FICO rating may be increased, it important to have an idea on what FICO rating is based upon.

Essentially, 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% – types of credit used (installment, revolving or consumer finance).
  • 10% – recent search for credit and/or amount of credit obtained recently.

The first step to improving a FICO rating is to get a copy of your credit report. This can be attained from Equifax, TransUnion or Experian.

Then, prepare yourself for the pain (or delight if you are an accounting professional) of examining all the numbers and making sure everything adds up to the best of your recollection.

The main 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 proper correction.

If you have serious Charge Card debt where most 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, 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.

Then, it is equally important for you to pay off your debt promptly. 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 every time.

The punctuality of your payment affects 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 maintain your longest standing 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 actually 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 annual interest rate.

All in all, it’s a not nuclear physics when it concerns raising your FICO score. All it takes is for you to lower your credit card debt, pay your bills on time and keep track of where you are heading in your spending, mortgage and loans.

The specialists 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 Elkins, New Mexico you can call toll free 844-207-3818 to get started increasing your credit history and fixing your credit report.

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