FICO score...The Importance of Keeping It High

FICO Score...The Importance of Keeping It High

Many people do not think about their credit score until it becomes a problem. Once the problem has occurred, rebuilding your credit is a continuous process.
Your FICO score (created by the Fair Isaac Corporation) is a number ranging from 300 to 850. It is formulated using a mathematical model based on individual credit history. Your FICO score is indicative of whether or not you have paid your bills or whether or not you paid your bills on time. Your FICO score will help lenders determine whether or not you will repay the loan. The higher your FICO score, the more likely you are to repay the loan.
In order to get approved for loans and receive a good interest rate, you need to maintain a score of 700 or above. If you have a score less than that (500 or less) you may be charged higher interest rates and depending on the lender and their credit requirements, you may not be approved.
Listed below are some tips on how to increase your FICO score and keep it high!
1. Paid off accounts: Don’t close these accounts. By doing so, you are reducing your total available credit, which will then in turn change your utilization ration. This amount is calculated by dividing your total debt by your total available credit. Also by closing those accounts you are shortening your credit history.
2. Loans: Secure a small personal loan and make consistent, timely payments. Start with a small amount so that you will ensure that the monthly payment is comfortable and easy to manage. Include that payment in your budget. In order to ever be approved for large loans like a car or mortgage loan, you have to be able to show that you have made payments. This shows the lender that you are responsible and that you have a strong payment history.
3. Secured credit card: These cards are useful for rebuilding good credit because they usually do not have a high spending limit. Your credit limit is usually based on the amount you deposited as security. This avoids overspending and makes it a lot easier to pay the balance off in full. Be sure to get a secured credit card that reports to at least one credit bureau.
4. Bill pay: Always pay your bill on time. Lenders always check your credit report to see whether or not you paid your bills and whether or not those payments were made on time. Late payments can lower your FICO score. To increase your FICO score immediately begin paying your bills on time. You will then begin to see an increase on your credit report in as little as 30 days.
To learn more about increasing your FICO score, visit:

http:// www.attorneycreditrepairguide.com