Why is your FICO score rating so important?
If you have ever had to check your FICO credit score, then you will know that your credit is based on a number. This number is your FICO credit rating. It was developed in 1989 and is used by lenders to determine the type of loan they will give you. The higher the FICO score rating, the better your chances are of acquiring credit and loans.
How To Determine Your FICO Score Rating
The FICO score ranges between 350 and 800. If your score rating is higher than 750, you have excellent credit. You can basically get any loan you want with this high of a FICO score rating. If your score rating is between 660 and 749, your credit is pretty good. The average score rating is between 725 and 750. If your score rating is between 620 and 659, it’s adequate. You might have a harder time getting a loan with a low interest rate with this score. Your score rating needs some help if it is below 619. You will have a hard time finding a lender who will take a risk on you. If you do find a lender, the interest rates will be sky high. The plus to this would be getting your FICO credit score up to par. You should really focus on repairing your FICO score rating if it is below 500 because there is a slim to no chance of any lenders wanting you.
Many factors go into determining your FICO score rating. A big portion of your score depends on how well you manage paying the payments on time. Punctuality is very important and can really help your score go up. Another aspect into figuring out your FICO score rating would be the ratio between your actual debt and your available credit. An example would be having a credit limit of 500 dollars and only owing 200. So your available credit would be 300. Your credit history is also a factor. The longer you have had credit, the better your chances are of getting more. Two smaller factors that go into it are the types of credit used and the most recent searches for credit.
Improving Your FICO Score Rating
Don’t sweat to much if you happen to have a low FICO score rating. There a ways to increase your rating. The best thing you can do is to pay your bill on time. If you have missed payments, make sure to get caught up as soon as possible. Keep paying off your debt. Don’t apply or obtain a new credit line to pay off an old one. You can help your credit history by opening a new account and making on-time payments. Re-arrange your payment plan with your lender if the payments are too much for you to handle. Keep your credit card balances low. If you follow these steps, your FICO score rating should start rising.
Try to keep your FICO score rating as high as possible. It will be very beneficial to you when you are in need of a loan, especially if you don’t feel like paying high interest costs.
You never know when you will need to have a good FICO score rating!