Fico Credit Score

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Did you know that your credit score will have a direct impact on most major purchases you make? It will definitely have an effect on the rate you’ll get with your auto loan, or how much you’ll be able to borrower for a new home. Most financial institutions in the United States use FICO credit scores as a basis for providing loans to consumers. A FICO credit score is made up of a variety of personal financial statistics and can range from 300 (lowest) to 850 (highest). This number is directly related to loan qualification and interest rate – the higher the score, the lower your rates will be on a loan and the more credit you may be able to qualify for in the future. Here’s how this score is broken down: • 35% of the Score = Payment History: How have you repaid your debt in the past? Generally, anything negative will drive down your score and anything positive will drive up your…show more content…
Do you max out your credit cards? Are you always close to your credit limits? The best credit scores typically have anywhere from seven to 20 percentage usage of their overall debt. • 15% of the Score = Length of History: It is impossible for a person who is new to credit have a perfect score; it just doesn’t work that way. You have to prove over time that you can manage credit responsibly. • 10% of the Score = New Credit: How many credit inquiries or new lines of credit (including credit cards) do you have? More is not better in this instance. Be sure to limit any new credit you request to only that which you truly need. Just getting a credit card to get a credit card “just in case” will not usually help your score. You need to use the credit you have, but use it wisely. • 10% of the Score = Credit Mix: What type of loans do you have? A credit card? An auto loan? A home loan? In most instances, lenders find that borrowers with a good mix of credit may be less of a risk for
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