The Use of FICO Scores in Miamitown, Ohio

In Miamitown FICO Score is Important

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

In Miamitown, Ohio one of the most frequent discussions amongst people could be related to credit rating. The main reason for this is the score achieved by any consumer would greatly impact the amount of home mortgage, loan rates and many other financial costs.

To put it simply, a credit report is similar to a report card from Miamitown High School (I know, we’ve all been through that) where you would get a reprimand for a low grade and a reward for a good grade.

Contrary to what lots of people in Miamitown believe, there is not one universal way of classifying credit history where the last time you took an extra dime from the cashier would be recorded on your credit history.

There is, a widely used well known credit score in the U.S., 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 embraced tool by most Miamitown banking and loan brokers in Miamitown.

Before going into the discussion on how FICO rating can be increased, it handy to have an outline on what your FICO rating is based upon.

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% – types 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 credit report. This can be attained from Equifax, TransUnion and Experian.

Next, prepare yourself for the misery (or joy if you’re a bookkeeper) of examining all the numbers and making sure everything adds up to the best of your knowledge.

The main reason is because if something is wrong in your report, it’s best to get all of them corrected immediately because it can take up to several months in order to get a update entered.

Furthermore, if you have serious credit Card debt where a lot of your credit card balances are at the maximum, 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 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 schedule. 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 time and every time.

The punctuality of your payment impacts 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 in a timely manner 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 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 on schedule and keep track of where you are heading in your spending, mortgage and loans. 

There are specialists 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 Miamitown, Ohio you can call toll free 844-207-3818 to get started increasing your credit score and fixing your credit report.

Category: General