What Is A FICO Score?
Your FICO score or credit score as it's commonly called is a very important calculation that can control whether or not you are eligible to receive credit and if eligible the terms you can receive credit under. Failure to understand the impact this score can have on you future purchasing power and lifestyle can be disastrous. This article will break down all the information you need to know regarding your FICO score. As I mentioned above the FICO score is a numerical score that is based on your financial history as collected in your credit report. Creditors can use this number to evaluate whether or not you are able to pay a loan back on time. The higher the score the more likely you are to pay off a loan on time and the less of a credit risk you pose. The FICO or credit score ranges are broken down as follows: 720-850 - This represent the best score range 700-719 ? Able to obtain favorable financing terms 675-699- This is still a decent score range 620-674 ? May have trouble obtaining favorable credit terms 560-619 ? May have trouble obtaining credit 500-559 ? Time to improve your score Your credit score is broken down into 5 distinct categories each with their own importance based on a percentile. The 5 categories and the percentage they represent I relation to your credit score are as follows: Payment History ? 35% Amounts Owed ? 30% Length of Credit History ? 15% New Credit ? 10% Types of Credit Used ? 10% Your payment history contains information on credit cards, retail accounts, installment loans, finance company accounts and any mortgages you may have had. It also details any past due accounts and the amount owed on hem. You will also find bankruptcy information as well as other adverse information in regards to your credit history. This is why it warrants a 35% piece of the pie. Your amount owed is generally speaking the amount owed on any accounts you currently have and number of accounts with balances. Note that it has a large impact (30%) on your credit score. The length of your credit history details when accounts were opened and the last activity on those accounts. New credit shows the number of recently opened accounts by the type of account and number of account inquiries. Finally the type of credit used is a snapshot of what types of financing you have held. Other information that is included in your credit report but has no bearing on your FICO score includes your race, age, where you live and your sex and employment information. Although the FICO score doesn't use these factors the employment information may be used by other companies and creditors to help in their decision making process. There are three major credit-reporting agencies - Equifax, Experian and TransUnion that have your credit information on hand. Each of these credit bureaus maintains their information separately, which can cause the financial data to be slightly different among the three of them. Most experts agree that in order to get the best snapshot of your financial history and credit worthiness it is a good idea to request a report from each of the reporting agencies. It is also highly recommended that you actually review your credit report once a year in order to identify and correct any errors before they cause any future potential problems when you apply for credit. Recent changes in the laws no allow for consumers to request 1 free credit report each year in order to look for any such errors. Here is the contact information for each of the three reporting credit bureaus: Equifax: (800) 685-1111, www.equifax.com
Experian: (888) 397-3742, www.experian.com
TransUnion: (800) 888-4213, www.transunion.com As you can see your FICO Score is a very important number that represents your financial trustworthiness in the eyes of creditors. Failure to properly monitor it could cause you future headaches when it comes time to apply for any form of credit. Timothy Gorman is a successful Webmaster and publisher of Debt-Relief-Solutions.com. He provides more debt relief, consolidation and credit repair information that you can research in your pajamas on his website.
Related News
Home > News > World Bank Launches Facility to Prevent ... - World Bank Group
UPDATE 1-Pininfarina sees agreement with banks by end-2008 - Reuters
WEALTHY NATIONS, OTHERS BEHIND FINANCIAL CRISIS MUST TAKE ... - 7thSpace Interactive (press release)
Six financial gifts that let you do more with less this season - MarketWatch
Firms Seek More Action to Unfreeze Lending - Wall Street Journal
Firms Seek More Action to Unfreeze LendingWall Street Journal -6 hours agoSo far, the Treasury's Troubled Asset Relief Program, or TARP, and Fed programs to ease the financial crunch have focused on banks and, more recently, ... |
Holders deem Station Casinos bond offer "deficient" - Reuters
GM, Chrysler Win Union Concessions to Bolster Aid Bid (Update3) - Bloomberg
Know the Details of the Mortgage Forgiveness Debt Relief Act - RisMedia.com (press release)
Andhra pays for fiscal profligacy, may be denied debt relief - Economic Times
Obama pledges relief to governors - The News Journal
Obama pledges relief to governorsThe News Journal, DE -9 hours ago"We don't believe economic problems that were in large measure created by too much debt will be solved by more debt," Sanford said Tuesday. ". ... |
|
|
 |
|
|
RELATED ARTICLES
Eliminating Credit Card Debt
The overwhelming task of eliminating your debts can often seem like an uphill battle. Without the knowledge and expertise of a professional on your side, unfortunately, the odds are not in your favor. In order to reduce your debt, you have several options; however, if you want to maintain a "good credit rating", you have to pay you bills on time; anything else will cause your credit score will suffer. With that being said please consider the following:
Slowing Spending - The Key To Your Debt Plans Success
Anyone who embarks on a debt reduction program should know the rules for success. There are
two. You need to stop adding to your debt. You need to find extra money to pay it off quickly.
Individual Voluntary Arrangements- A New Alternative to Bankruptcy
This May, the Department of Trade and Industry in the UK found that there were 10,091 bankruptcies in the first quarter of 2005. This represents an increase of 24.5% on the corresponding quarter of last year.
Debt Elimination
If you're reading this article right now I'm sure that you are looking for a debt elimination system that will help you get out from under you personal mountain of debt. Hopefully you're not looking for the magic pill that will suddenly dissolve your debt problem. I'm afraid that I have to tell you that there is no magic debt elimination system.
Debt Collectors; And what you can do to Get Them Out of your Life
FTC opinion letter on validation Section 809(a) of the FDCPA, 15 U.S.C. § 1692g(a)
Use A Debt Checklist To Examine Where You Are
A Debt Checklist allows you to look at items and areas of your financial life. You need to
examine these to gauge how you stand. Even if you believe you are in good shape take a close
look at these areas to be sure.
Debt Management Systems
What is a debt management system, and when do you need it? Like any kind of management system, debt help systems can be good or bad. We will take a look at what you can do to manage your debt better. One element is paying off debt, but that's not the only one. It is much more than paying off your credit cards, and doesn't end when you pay off your mortgage or car loan either. You have to make a system of good money management, and follow this system in your daily life. Here are the key elements in such a system:
Bankruptcy: What You Need to Know
Personal bankruptcy is a legal way to give people with overwhelming debt a fresh financial start. Many people do not realize that there are five types of bankruptcy options available under the U.S. Bankruptcy Code; however, for most consumers there are really only two viable options; Chapter 7 and Chapter 13 bankruptcy.
Whatever You Do....Dont Save Money!
No, that's not a misprint. Even though falling interest rates are good when you want to get a loan, they are bad for people with savings accounts.
Bankruptcy: Which Chapter Do I File?
There is more than one kind of bankruptcy. You should understand your options before deciding which chapter of bankruptcy you are going to file for, or if you are going to file for bankruptcy at all. Often the consequences of bankruptcy outweigh the benefits so it really is a very individualized decision and should be considered carefully. Bankruptcy should not be a rash decision.
Learn The 15 Debt Elimination Steps You Must Take Immediately!
What Everybody Needs To Know...Learn The Truth About Debt Elimination in 2005!
Debt
We all know about debt. If you don't have too much as an individual you can increase the quality of your life, but with more than you can handle it can make your life a nightmare.
Bankruptcy Your Best Bet?
Filing bankruptcy is a common practice among the U.S. Over 2 million people file for bankruptcy every year. So many families today are swimming in debt, which is not surprising with the amount of credit that is being offered. If you pay your bills, you're given the opportunity to run up more bills. For young people, this is often too much responsibility to handle. Many people choose bankruptcy in order to gain a fresh start.
How To Pay Credit Card Debt Off
If you are determined to pay credit card debt off you are making the best financial decision of your life. The reason credit card debt is so bad is because it carries such a high interest rate.
5 Ways to Get Out of Debt
It has been said that everyday more and more people in the world are getting into unsecured debt. Once reason for this is the relative ease in which credit card companies and banks are extending credit to their customers. In fact, it was reported in the newspapers that in a test, a person was able to amass 15 credit cards in one afternoon quite easily.
Debt Problems? You Can Negotiate With Your Creditors
It is always possible to negotiate with creditors ? even if they have already taken you to court to get a judgment or to garnish your wages.
Is There Any Way To Get Out Of Debt?
In this era where we are bombarded daily with commercials on television, radio, billboards, through email, not to forget the flyers slipped under the car's wiper blades while shopping at the mall, it's no surprise that so many of us find ourselves endlessly in debt to the services and products offered by others. How can we refuse, when we're baited with the juicy orange carrot of '0% APR' up to a certain amount or for a specified time, or 'no money down' and 'easy installments' of just so much per month?
Your Secret Weapon... A Budget
For many, the word 'budget' immediately sends shivers down the spine. Why in the world would anyone need or want to budget their money?
What Does A Bankruptcy Trustee Do?
Once you file bankruptcy a court appointed bankruptcy trustee will oversee your case. The new law also requires that the bankruptcy petitioner to take a debtor education course and receive credit counseling from a U.S. Trustee approved non profit credit counseling agency.
Do It Yourself Debt Relief
With mounting bills and unforeseen hardships, you may be considering some form of debt relief. There are many options to help you, but the best may actually be you helping yourself. Here are some suggestions for starting debt relief and becoming more solvent.
|
