Sunday, 1 January 2012

Coping With Your Credit history And Your FICO History

By Douglas Herrera


Increasing your credit scores is essential if you want to repair your credit. A credit score is a number that represents your creditworthiness based upon the mathematical and statistical analysis of a variety of factors. A credit score will consider both the positive and negative information from a credit report, the amount of available credit compared to the quantity of credit used and open accounts.

Your credit rating most frequently used in the united states is the FICO score. The word FICO is an acronym for the Fair Isaac Corporation, which is a publicly traded corporation. You'll find it under the symbol "FIC". The Fair Isaac Corporation created the first credit scoring system in 1958 and the first credit scoring system for a bank credit card in 1970. While there are more companies that also do credit scoring the FICO score is still the most widely accepted. Suitable credit repair can improve your FICO score.

The FICO score is acknowledged to be among the best predictors of creditworthiness because it only considers fair and objective measures such as whether you have had financial difficulties in the past and your current level of debt. The FICO score does not consider race, gender or ethnicity. It is considered to be one of the best measures for underwriting because of its unbiased scoring. Repairing your bad credit can increase your FICO score.

Fixing your credit and increasing your credit score will definitely increase your chances of getting credit. A low credit score may cause a lender to require you to provide more collateral or even provide a more thorough asset and income verification. Many lenders use the FICO score to deny or issue credit and to determine how high the interest rate will be.

A credit score can differ among the three major credit-reporting agencies, which are TransUnion, Experian and Equifax. They each use different criteria and consider the data in different ways. When you are improving your credit rating make sure that you get a report from each one of the three companies. Many lenders will pull from just one company but some will take an average of the three. Every single company's report is important to consider as you repair your credit.

If you want to repair your credit you will need to make sure that all your expenses are in line and that your payments are made on a regular schedule. A credit score takes into consideration how much credit is available compared to how much credit is used. So that you can raise your credit rating, it is smart to have a higher credit limit yet use very little of it. Just make sure you are making a consistent payment, albeit a small one.

Additional factors to acknowledge when you are improving your credit rating and increasing your credit scores are the length of your credit history, your credit cards, any outstanding balances and credit applications. Do not apply for credit unless it is absolutely necessary as each inquiry on your credit report counts against you on your credit rating and FICO scores. Also, don't cancel your credit cards if you decide not for their services but rather just put them away so that you won't use them. Canceling an account will work against you.

It will only take about 6 months to a year to impressively repair your credit. Make sure that your debts are paid on time, that you don't apply for further credit if you're able to avoid it and use the credit you have intelligently and sparingly.




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