Credit Score Help what is FICO Three Digit Number Is

The simple three digit number that is the great credit score has all ready became critical to your financial life. The lenders are simple business people who want to make money.They need to give money to some one and at the same time they want their money back with at least minimum interest.

There the chase for people who pay on time comes into action.This chase is based on the credit score of you.If you are habituated to pay all your credit bills on time, you will be having a good credit score.Credit card companies and bankers search for the people like you and send offers like approved loans at reasonably small interest rate.This is the cycle and keep happening around you.

When the world around you is in financial crisis with big bailouts from the federal people,Weather you get a asked and applied loan may depends on many factors.It is sure that one of the decisive factor is going to be your credit score. The basic job of your FICO score is to predict your financial behavior and your commitment to the loans that you have taken. In other words they are checking are you a guy who won't pay the loan and how risky it is to give you the money in the name of a loan.So it is going to effect you financially and even personally and can give you some sleepless nights.

Missing a single payment on time may cost you very dear and take your score a hundred points away.This small error is going to hunt you for a long seven years and you need to take a lot of pain to get back to the normal status. Thus better to be careful and make sure that you are paying the credit bills on time.

In general your report consists of your name,address,social security number and some financial details like your credit accounts,the details of the requests that who asked to check your report and collections and public records like law suites against you and judgments.

The most important factors that influence your credit report are

1.Your payment history and not missing a bill will give you great advantage.
2.How much of available credit that you are using and less you are using better it would be.
3.The age of your credit and older is better.
4.When you have applied for a credit in the recent history also affects your score.
5.The types of credits you are using.

Let us analyze each point in a bit detail.

1.Payment history and Credit Score

1.Your payment history is one of the most important thing in the credit report or the one who makes a big difference to your fico score. In many cases it may effect your report by a big 40 %.The bankers and lenders would like to know how prompt you are in repaying the loans that you have taken.The time you are paying your monthly installment is one of the important criteria to get future loans.They also would like to know how occasionally you are late in paying the bills and by how many days.

As time passes bad effect of your late payment slowly reduces.It is also the fact that if you miss the payment dates more number of times, more the bad effect on credit report.It is obvious that a thirty days delay is better when compared with sixty or one twenty days delay. Missing the payments like collections, tax liens, and bankruptcy are the serious ones who effect your three digit figure seriously.

2.The Credit usage Limit

The magnitude of the amount that you use when compared with available money. It is preferable to use less than thirty percent to have better score.More you use,lenders feel like you are desperate for the money and doubt about repayment ability.The bigger the gap between available value and using value make you better person in terms of money management.It is the view of the people who are lending money and we have no option other than respecting it. Approximately thirty percent of your score depends on this factor.

3.The age of your credit

From how many days you are using the credit and how prompt you are paying them back over the time is going to effect your score by approximately 15%.Longer the history that is positive history better its effect will be.

The age of your oldest account and the average of other accounts will be the deciding factors.

4.When you have applied for a credit recentlyApplying for a new loan or a new credit card in many ways simultaneously is treated negatively by the lenders.This effect will be further bad if you are not having the long credit history.This effects your score by all most ten percent.So be careful about shopping around for money lending and doing it very frequently and in a very small interval affect your future loans.

5. The types of credits that you use

What kind of money loans you take like mortgage,car loan or a personal loan is going to make a difference to your three digit score.Any way applying for different lines just to boost your FICO score may affect in in reverse way and be cautious about it. Standard credit card lending is better when compared with department cards and it is the view of lenders. Installment loans is better as they will create a long financial history and it will be updated once in every month.

You can have a look at the over view of the fico score around you in the country for the reference.



(picture Curtice http://www.flickr.com/photos/bartclaeys/3928496281/)

Getting a credit score help is important and you can learn a lot about its importance and about credit score chart at this blog.I welcome your further comments.

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