The Use of FICO Scores in Eagle Creek, Indiana

In Eagle Creek Your FICO Score is Important

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

In Eagle Creek, Indiana among the most common discussions among friends could be connected to credit reports. The reason for this is because the score achieved by any individual would significantly influence the amount of mortgage, car loans and many other financial services.

To put it simply, a credit report is like a report card from Eagle Creek High School (I know, we’ve all been through that) where you would get a punishment for a poor performance or a reward for a good grade.

Contrary to what most people in Eagle Creek believe, there is not one universal way of categorizing credit rating 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 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 Eagle Creek banking and in the credit industry in Eagle Creek.

Before getting involved with the discussion on how FICO rating might be increased, it is worthy to have a rough idea on what your FICO rating is based on.

Simply speaking, 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 obtain a copy of your own credit report. This can be attained from Equifax, TransUnion or Experian.

After that, brace yourself for the misery (or fun 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 because if something is wrong in your credit report, it’s best to get all of them corrected immediately because it can take up to months to get a proper correction.

If you have serious Credit Card debt where almost all of your card balances are close to the credit limit, it’s best if you pay them off as soon as possible. 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 high balance 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 manage 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 schedule NOW is outweighed by the fact that you paid your debt on schedule 3 years ago.

It is always important to keep 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 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 receive a larger loan or a lower annual interest rate.

All in all, it’s a not rocket science when it pertains to raising your FICO score. All it takes is for you to lower your total debt, pay your bills in a timely manner and monitor 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 Eagle Creek, Indiana you can call toll free 844-207-3818 to get started increasing your credit history and fixing your credit report.

Category: General