Jan 232017

In Glen White Your FICO Score is Important

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

In Glen White, West Virginia one of the best popular discussions with people is connected to credit reports. The main reason for this is due to the fact that the score achieved by any consumer would greatly affect the amount of mortgage, loans and many other financial related services.

To put it simply, a credit rating compares to a report card from Glen White High School (I know, we’ve all been through that) where you would get a reprimand for something low but get a reward for a good performance.

Unlike what lots of people in Glen White believe, there is not a single, universal way of categorizing credit history where the last time you took an extra 5 cents from the cashier would be recorded on your credit report.

There is however, a widely used popular 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 used tool by most Glen White banking and mortgage brokers in Glen White.

Before going into the discussion on how FICO rating can be increased, it valuable to have an idea on what your 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% – varieties 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 personal credit report. This can be attained from Equifax, TransUnion and Experian.

After that, brace yourself for the torment (or delight if you’re a bookkeeper) of going through all the numbers and ensuring everything adds up to the best of your recollection.

The main reason is because if something is incorrect in the report, it’s best to get it fixed because it can take up to several months in order to get a proper correction.

If you have serious credit card debt where most of your balances are close to the credit line, it’s best if you pay them off immediately. If you need help paying off debt, contact OperationCare 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 schedule. Even if you manage to pay off your debt, it would not have the impact you want 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 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. 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 5 years as compared to an average rating with a credit history of 30 years, the person with the longer credit history would possibly obtain a larger loan or a lower annual interest rate.

All in all, 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 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 report. Enroll in one of their coaching programs to improve your score.

Even if you don’t live in Glen White, West Virginia you can call toll free 844-207-3818 in order to get started increasing your credit history and fixing your credit report.

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