Jan 232017
 

In Plaza FICO Score is Important

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

In Plaza, New Jersey some of the most frequent discussions with friends is connected to credit history. The reason behind this is due to the fact that the score achieved by any individual would greatly impact the amount of mortgage interest, loan rates and many other financial related services.

Simply put, a credit rating is like a report card from Plaza High School (I know, we’ve all been through that) where you would get a reprimand for something low but a reward for a good performance.

Contrary to what many people in Plaza believe, there is not a single, universal way of ranking credit report where the last time you took an extra 5 cents from the cashier would be recorded on your credit report.

There is though, a widely used well known credit score in the USA, commonly 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 national banking and loan companies in Plaza.

Before engaging in the discussion on how FICO rating might be boosted, it valuable to have an outline on what your FICO rating is based.

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 initial step to improving a FICO rating is to obtain a copy of your own credit report. This can be attained from Equifax, TransUnion or Experian.

Next, brace yourself for the misery (or joy if you’re an accountant) of examining all the numbers and ensuring everything adds up to the best of your recollection.

The main reason is due to the fact that if something is wrong in your report, it’s best to get them corrected immediately because it can take up to several months in order to get a correction.

Furthermore, if you have serious Credit Card debt where most of your card balances are near the credit limit, it’s best if you pay them off as soon as possible. If you need help paying off debt, contact Operation Care 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 high balance 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 have the ability 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 each time.

The punctuality of your payment takes up 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 on schedule 3 years ago.

It is always important to keep your oldest 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 is.

For example, even though you score a relatively high score, if you 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 interest rate.

Altogether, 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 in a timely manner and keep an eye on where you are heading in your spending, mortgage and loans.

The specialists at CambridgeCreditRepair.com can help you better understand your FICO score. Enroll in one of their coaching programs to improve your score.

Even if you don’t live in Plaza, New Jersey you can call toll free 844-207-3818 in order to get started increasing your FICO score and fixing your credit report.

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