Posted on May 21, 2015 in Credit Score
FICO is a publicly traded corporation that created the most well known and widely used credit score model in the United States. This credit score, known as your FICO score, is used in all sorts of credit decisions made by banks, lenders, and other creditors. If you have a low FICO score you will quickly realize just how hard it is receive any sort of credit, which is why it is so important that you do everything you can to keep your FICO score in good standing.
One of the best ways to ensure that you maintain a high FICO score is to understand what affects your score to begin with. Instances where you are late paying a bill or fail to pay a creditor all together are the main ways that you can damage your FICO score. Monitoring your credit report is the best way to know what your FICO is and what is currently affecting your rating. Consumers are allowed one free credit report from the three major credit reporting bureaus every 12 months. Signing up for this free credit report is a fantastic way to catch any errors that might be on your credit report. The reporting agencies have been known to make errors in the past so it is extremely important that you keep an eye out for these so your FICO score does not suffer the consequences. Also, closely monitoring your credit report will allow you to stop identity theft in its tracks. Identity theft can ruin someone.s FICO score, which is why it is so important for you to pay attention to any signs of identity theft on your credit report.
If you do find yourself with a low FICO score you will want to take immediate steps to improve it. The quickest way you can start to repair a low FICO score is by paying your monthly bills on time. Setting up a monthly budget will help you manage your money so that you are paying off all of your monthly bills before they become delinquent. After you have set up a budget you will then want to pay off any outstanding debts. Removing these debts from your credit history will dramatically increase your FICO score. Another good way to improve your credit score is to sign up for a secured credit card. It is extremely difficult to spend more money than you can afford with a secured credit card, which means you will not put yourself into more debt when using this type of card. Also, secured credit cards report to the three major credit bureaus, so when you pay off your monthly statements in a timely fashion you will be increasing your credit rating and FICO score.
Your FICO score is one of the most important pieces of information that consumers carry with them. Any credit decision made by a bank, credit card company, or creditor will utilize your FICO score in some capacity. If you have a low FICO score you will find it extremely difficult to get type of loan or credit making it hard to make life.s necessary purchases. By taking the appropriate steps to monitor your credit history and immediately increase your FICO score when it starts to lower you will be setting yourself up a life of good credit.