In Minocqua FICO Score is Important
Here are the Best Ways to Improve Your Credit Report FICO Score
In Minocqua, Wisconsin among the best common discussions with friends would be related to credit report. The reason behind this is the score achieved by any consumer would substantially impact the amount of mortgage interest, car loans and many other financial related costs.
To put it simply, a credit score is similar to a report card from Minocqua High School (I know, we’ve all been through that) where you would get a punishment for a low grade and rewarded for a good grade.
Contrary to what most people in Minocqua believe, there is not one universal way of classifying credit rating where the last time you took an extra 5 pennies from the cashier would be recorded on your credit report.
There is however, a widely used well known credit score in the United States, commonly 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 accepted tool by most banking and mortgage brokers in Minocqua.
Before engaging in the discussion on how FICO rating might be boosted, it valuable to have a rough idea on what FICO rating is based upon.
Basically, FICO rating is separated into a few statistical components where these components are made up from:
- 35% – punctuality of payment in the past
- 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% – kinds of credit used (installment, revolving or consumer finance).
- 10% – recent search for credit and/or amount of credit obtained recently.
The first step to improving a FICO rating is to get a copy of your credit report. This can be attained from Equifax, TransUnion or Experian.
Next, brace yourself for the pain (or fun if you are a bookkeeper) of going through all the numbers and making sure everything adds up to the best of your recollection.
The main reason is because if something is incorrect in your credit report, it’s best to get them corrected because it can take up to several months to get a correction.
Furthermore, if you have serious Credit card debt where many of your Credit Card balances are at the credit line, it’s best if you pay them off as soon as possible. If you need help paying off debt, contact Operation Care Credit Counseling for financial coaching. Call them at 844-207-3818.
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 high balance credit card debt would definitely increase the FICO score as it impacts 30% of the FICO score.
Subsequently, it is equally important for you to pay off your debt promptly. Even if you have the ability to pay off your debt, it would not have the desire impact on your FICO score if you do not pay your debt on time and each time.
The punctuality of your payment affects 35% of your score and it is important to know that paying your debt on schedule NOW is outweighed by the fact that you paid your debt on time 3 years ago.
It is always important to keep your longest standing 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 actually is.
For instance, even though you score a relatively high score, if you credit history is just five years when compared to 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 rocket science when it pertains to raising your FICO score. All it takes is for you to lower your credit card debt, pay your bills on schedule and monitor where you are heading in your spending, mortgage and loans.
The experts at Cambridge Credit Repair Company 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 Minocqua, Wisconsin you can call toll free 844-207-3818 in order to get started increasing your credit score and fixing your credit report.