The Use of FICO Scores in Prichard, Alabama

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Jan 222017

In Prichard The FICO Score is Important

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

In Prichard, Alabama some of probably the most common discussions with friends would be connected to credit history. The main reason for this is because the score achieved by any individual would substantially impact the amount of home mortgage, car loans and many other financial related services.

Simply put, a credit report is like a report card from Prichard High School (I know, we’ve all been through that) where you would get a punishment for a low grade but rewarded for a good grade.

Contrary to what lots of people in Prichard believe, there is not one universal way of categorizing credit score 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, 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 utilized tool by most national banking and in the credit industry in Prichard.

Before engaging in the discussion on how FICO rating might be improved, it valuable to have an idea on what FICO rating is based upon.

Basically, 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% – kinds of credit used (installment, revolving or consumer finance).
  • 10% – recent application for credit and/or amount of credit obtained recently.

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

After that, brace yourself for the agony (or pleasure if you are an accountant) of examining all the numbers and making sure everything adds up to the best of your understanding.

The main reason is because if something is incorrect in your credit history, it’s best to get it fixed because it can take up to several months in order to get a update entered.

If you have serious Charge Card debt where almost all 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 Operation Care 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 any excess 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 schedule and each 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 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.

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 receive a larger loan or a lower interest rate.

All in all, it’s a not rocket science when it comes to raising your FICO score. All it takes is for you to decrease your total 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 Cambridge Credit Repair 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 Prichard, Alabama you can call toll free 844-207-3818 to get started increasing your credit score and fixing your credit report.