What You Should Know About Your FICO Score
If you have ever applied for any type of line of credit, big or small, chances are the credit agency evaluated your credit score, also known as your FICO score.
FICO, Fair Isaac Company, is a credit reporting agency established in the 1960’s. Your FICO score can mean the difference between getting your line of credit or not. The better your score the more likely you will get approved while getting a lower interest rate. But if you don’t score well you still may get approved, however the interest rate associated with the line of credit may not be as favorable. FICO scores range between 300 to 850 the higher the number the better.
Building a high credit score takes time. Obviously if you don’t have much credit history or if you have had some negative marks added to your credit report in recent years it will take a bit longer to improve your score.
It is important to remember that missed payments and outstanding balances on previous lines of credit have the worst impact on your score. By making your payments on time and keeping your balances low you can, almost instantly, improve your FICO score.
The best way to ensure you maintain a good FICO score is to check your credit report at least once a year. By law you can get your credit reports free once every 12 months or if a lender turns you down for a loan based on your credit score.
FICO scores are not credit reports but instead are a mathematical system for distilling credit report information into an easy to read number.
