The Use of FICO Scores in Chillisquaque, Pennsylvania

In Chillisquaque Your FICO Score is Important

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

In Chillisquaque, Pennsylvania some of the most frequent discussions among friends would be connected to credit history. The main reason for this is due to the fact that the score achieved by any person would substantially impact the amount of mortgage, loans and many other financial services.

To put it simply, a credit history is similar to a report card from Chillisquaque High School (I know, we’ve all been through that) where you would get a reprimand for a poor performance and rewarded for a high score.

Contrary to what lots of people in Chillisquaque believe, there is no one universal way of classifying credit score where the last time you took an extra 5 cents from the cashier would be recorded on your credit history.

There is though, a widely used popular 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 consumer banking and in the credit industry in Chillisquaque.

Before going into the discussion on how FICO rating might be improved, it handy to have a rough idea on what your FICO rating is based on.

Essentially, FICO rating is separated into a few statistical components where these components are made up from:

  • 35% – punctuality of payment historically
  • 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 initial 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 delight if you are an accounting professional) of going through all the numbers and making sure everything adds up to the best of your knowledge.

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

Secondly, if you have serious Credit Card debt where most of your card balances are close to the maximum, 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 any excess credit card debt would definitely increase the FICO score as it impacts 30% of the FICO score.

Afterward, it is equally important for you to pay off your debt on schedule. 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 every month.

The punctuality of your payment affects 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 time 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 is.

Even if you score a relatively high score, if your credit history is just five 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.

In conclusion, it’s a not rocket science when it concerns raising your FICO score. All it takes is for you to decrease your total debt, pay your bills on time and keep track of where you are heading in your spending, mortgage and loans. 

There are professionals 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 Chillisquaque, Pennsylvania you can call toll free 844-207-3818 to get started increasing your credit history and fixing your credit report.

Category: General