How your FICO score is determined by the
article by Larry Lane
How your FICO score
Determined
By Larry Lane http://www.InvestorZoo.com
If you want to borrow money, your credit score determines the amount of credit you receive and what interest rate you receive on your purchase. Your FICO score will have a direct effect on the establishment of new lines of credit through credit cards and buying a car or a new home. There are a number of employers who request a credit check before you even get a job. Having a good credit rating is essential for financial success.
Your FICO score is between 300 and 850. A credit rating of 720 or more shown to have an excellent credit rating. A score of 650 or less means that your credit score needs help. The information in your credit score is provided to creditors on your credit report, which can be obtained from three major credit bureaus (Experian, Equifax or TransUnion). Your FICO score will have a direct determination of the interest rate you qualify for your home purchase. You can have as many as a variation of 1-2% of those with good credit above 750 than below 600. Depending on your loan amount, which could result in the payment of an owner to 0 or more a month for life loan.FICO scores are calculated based on different criteria in your credit report in general. These data are grouped into five categories. The percentages below reflect the importance of each category is to determine your FICO score. Payment History
1) (35%) came time to pay bills from credit cards, retail accounts, mortgages, etc.? Do you have any judgments, lawsuits, liens, notices of collection, late payments or bankruptcies in your past? If you have a crime, how much and how long they were in default? Do you have a number of invoices marked “paid as agreed”
2) Amount of debt (30%) What is the total amount of revolving credit outstanding? What types of debts you have? A high balance of $ slope with a credit card company will lower your credit score a mortgage. How many credit card accounts are open? How much of your credit line was used with each card? What is Your total outstanding of your total income? Credit History
Duration
3) (15%) How much time has passed since you opened your credit accounts? The more you established credit history, the highest score to be generated.
4 credits) newly created (10%) Have you recently opened multiple accounts? What types of accounts are open and do you have a lot of credit applications years? A restored positive credit history following credit problems to pay? 5) Types of credit used (10%) What type of credit is open open (credit cards, retail accounts, the installment loans, mortgages, consumer finance accounts, etc.) A newly opened credit card can be considered negative. Second mortgage has been paid on time for two years will be added to your FICO score. If you are looking for a loan, lenders look at many things to make a credit decision. In addition to your FICO score, employment income, how long they worked at your current job and the line type of credit you are applying, are determining factors. Late payments will lower your score
, but establishing or re-establish a good record of timely payments will increase your FICO score.
If you do not have a credit history, you will have a hard time buying a car or house. You must use a card to a large extent and that both others as backups in case of emergency. Paying for purchases made in full next month. Needless to say, if you own a home and have a mortgage, maintain at all costs. Being late on a loan mortgage can seriously affect your FICO score. Other loans hurt your credit score include auto loans, student loans and credit cards from department stores. In general, the Society of the utility, cable and phone does not report late pays to credit bureaus. Before dismissing your next electric bill, call and discuss payment plans. Every business is different and each has its own policies and procedures when reporting to credit bureaus . Larry Lane is the editor of http://www.InvestorZoo.com, a social networking site specializing in personal finance. Questions and comments email Larry.Lane InvestorZoo.com @
About the Author
Larry Lane is the head of biz dev and blogger for InvestorZoo a social network dedicated to personal finance. Are you a financial professional looking to help people with money problems and gain worldwide exposure? Please send me an email @ larry.lane InvestorZoo.com or call me directly at 425-591-9315.
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