The Use of FICO Scores in Blanco, New Mexico

In Blanco The FICO Score is Important

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

In Blanco, New Mexico one of probably the most frequent discussions among friends would be connected to credit scoring. The main reason for this is because the score achieved by any person would significantly affect the amount of home mortgage, car loans and many other financial related costs.

Simply put, a credit history is similar to a report card from Blanco High School (I know, we’ve all been through that) where you would get a punishment for a poor performance and get a reward for a good grade.

In contrast to what many individuals in Blanco believe, there is not one universal way of classifying credit report where the last time you took an extra 5 pennies from the cashier would be recorded on your credit history.

There is however, a widely used popular credit score in the United States, 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 accepted tool by most national banking and mortgage companies in Blanco.

Before engaging in the discussion on how FICO rating can be improved, it is worthy to have a rough idea on what FICO rating is based upon.

, 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 acquire a copy of your credit report. This can be attained from Equifax, TransUnion or Experian.

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

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

Furthermore, if you have serious Credit card debt where many of your card balances are at the credit limit, it’s best if you pay them off asap. If you need help paying off debt, call for help at 844-CARE-866.

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 promptly. Even if you are able 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 every month.

The punctuality of your payment affects 35% of your score and it is vital 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 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.

Altogether, it’s a not rocket science when it comes to 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. 

There are experts at 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 Blanco, New Mexico you can call toll free 844-207-3818 to get started increasing your FICO score and fixing your credit report.

Category: General