The Use of FICO Scores in Hastings, Minnesota

In Hastings FICO Score is Important

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

In Hastings, Minnesota some of the most common discussions with friends would be related to credit report. The reason behind this is the score achieved by any individual would greatly impact the amount of mortgage, car loans and many other financial costs.

To put it simply, a credit rating compares to a report card from Hastings High School (I know, we have all been through that) where you would get a punishment for a poor performance and get a reward for a high score.

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

There is, a widely used well known 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 utilized tool by most national banking and loan brokers in Hastings.

Before getting involved with the discussion on how FICO rating could be boosted, it important to have an outline 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% – types of credit used (installment, revolving or consumer finance).
  • 10% – recent search for credit and/or amount of credit obtained recently.

The very first step to improving a FICO rating is to get a copy of your credit report. This can be attained from Equifax, TransUnion and Experian.

After that, brace yourself for the distress (or fun 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 because if something is wrong in the report, it’s best to get it corrected because it can take up to several months to get a correction.

Furthermore, if you have serious credit card debt where the majority of your credit card balances are near the credit line, it’s best if you pay them off as soon as you can. If you need help paying off debt, call for help at 844-CARE-866.

The banks and lenders prefer a large 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.

Subsequently, 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 impact you want on your FICO score if you do not pay your debt on time and each time.

The punctuality of your payment impacts 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 oldest 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 qualify for a larger loan or a lower interest rate.

All in all, it’s a not rocket science when it concerns raising your FICO score. All it takes is for you to reduce 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. 

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 Hastings, Minnesota you can call toll free 844-207-3818 to get started increasing your credit history and fixing your credit report.

Category: General