The Use of FICO Scores in Douglas, Illinois

In Douglas FICO Score is Important

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

In Douglas, Illinois some of the most frequent discussions with people could be connected to credit history. The reason behind this is due to the fact that the score achieved by any person would greatly affect the amount of mortgage, loans and many other financial costs.

To put it simply, a credit rating is like a report card from Douglas High School (I know, we have all been through that) where you would get a punishment for a low grade or rewarded for a good grade.

Unlike what many individuals in Douglas believe, there is not one universal way of categorizing credit score where the last time you took an extra dime from the cashier would be recorded on your credit history.

There is, a widely used popular credit score in the U.S., 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 mortgage companies in Douglas.

Before engaging in the discussion on how FICO rating could be increased, it important to have an idea 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% – kinds of credit used (installment, revolving or consumer finance).
  • 10% – recent application 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.

Next, prepare yourself for the pain (or delight if you are a bookkeeper) of going through 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 incorrect in your credit history, it’s best to get it fixed because it can take up to months in order to get a proper correction.

Next, if you have serious credit Card debt where a lot of your credit card balances are close to 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 any excess 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 on time. 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 schedule and each time.

The punctuality of your payment takes up 35% of your score and it is very 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 maintain your longest standing 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 actually is.

Even if you score a relatively high score, if your 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 obtain a larger loan or a lower 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 monitor where you are heading in your spending, mortgage and loans. 

There are experts at Credit Repair 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 Douglas, Illinois you can call toll free 844-207-3818 in order to get started increasing your credit score and fixing your credit report.

Category: General