The Use of FICO Scores in North New Portland, Maine

In North New Portland The FICO Score is Important

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

In North New Portland, Maine some of the best common discussions amongst friends would be connected to credit report. The main reason for this is because the score achieved by any individual would significantly impact the amount of mortgage interest, car loans and many other financial costs.

To put it simply, a credit score is like a report card from North New Portland High School (I know, we’ve all been through that) where you would get a punishment for something low but get a reward for a good grade.

Contrary to what most people in North New Portland believe, there is not one universal way of categorizing 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 popular credit score in the USA, 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 consumer banking and in the credit industry in North New Portland.

Before engaging in the discussion on how FICO rating can be increased, it valuable to have an outline 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% – types of credit used (installment, revolving or consumer finance).
  • 10% – recent application for credit and/or amount of credit obtained recently.

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

Next, prepare yourself for the pain (or fun if you’re an accounting professional) of examining all the numbers and ensuring everything adds up to the best of your understanding.

The main reason is because if something is wrong in your credit report, it’s best to get all of them fixed because it can take up to several months to get a correction.

If you have serious Credit Card debt where the majority of your card balances are close to the credit line, it’s best if you pay them off immediately. 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 maxed out credit card debt would definitely increase the FICO score as it impacts 30% of the FICO score.

Then, it is equally important for you to pay off your debt on time. Even if you have the ability 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 important to know that paying your debt on time NOW is outweighed by the fact that you paid your debt in a timely manner 3 years ago.

It is always important to keep your oldest 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.

For example, even if you score a relatively high score, if you credit history is just a few years when compared with 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 annual interest rate.

All in all, it’s a not nuclear physics when it pertains to raising your FICO score. All it takes is for you to decrease your credit card debt, pay your bills in a timely manner and keep track of 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 North New Portland, Maine you can call toll free 844-207-3818 to get started increasing your credit history and fixing your credit report.

Category: General