The Use of FICO Scores in West End, Texas

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Jan 212017

In West End The FICO Score is Important

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

In West End, Texas one of probably the most typical discussions with friends is related to credit scoring. The main reason for this is because the score achieved by any person would significantly impact the amount of home mortgage, car loans and many other financial services.

Simply put, a credit score compares to a report card from West End High School (I know, we have all been through that) where you would get a reprimand for a low grade but rewarded for a good performance.

Contrary to what most people in West End believe, there is not a single, universal way of categorizing credit score where the last time you took an extra nickel from the cashier would be recorded on your credit history.

There is, a widely used popular credit score in the United States, 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 mortgage brokers in West End.

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

Simply speaking, 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 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 going through all the numbers and ensuring everything adds up to the best of your recollection.

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

If you have serious Charge Card debt where most of your credit 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 maxed out credit card debt would definitely increase the FICO score as it impacts 30% of the FICO score.

Next, it is equally important for you to pay off your debt on schedule. Even if you are able 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 affects 35% of your score and it is vital 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 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.

For instance, even though you score a relatively high score, if you credit history is just 5 years when compared with 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 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 CambridgeCreditRepair.com 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 West End, Texas you can call toll free 844-207-3818 to get started increasing your credit history and fixing your credit report.