Learn About Improving FICO Credit Scores

 

 

    FICO Credit Score

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Learn About FICO Credit Scores

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FICO Credit Score

Credit Scores range from 300 to 850. A credit score is basically a quantification of an individual's creditworthiness. People with scores below 620 are considered poor risks, and those with scores above 680 are considered acceptable risks. The median score in the United States is 723; typically, the higher the score, the lower the mortgage.

The credit score factors include whether debts are paid on time, what type of credit has been granted in the past, how much of the available credit has been used, and whether there are any judgments, foreclosures, bankruptcies or liens.

While a FICO score is based upon several years of credit history, consumers may be able to raise their scores fairly quickly. Every bodies first step is to get a current credit report from each of the three bureaus. If there are mistakes that are damaging your credit, you have a right to get them off by writing to the company that issued the report.

In order to improve a credit score is to reduce the balances on your credit cards that are close to their limit. Major improvements will result if the balance is actually paid down. Another method of lowering your credit score is by transferring charges to a another card with a low balance.

Those considering taking out a mortgage in the next few months should avoid making substantial charges to credit cards, even if they plan to pay the full balance.

Consumers who don't have much of a credit history will not have a good credit score. If an individual is added as an authorized user on a credit card issued to a parent perhaps, the credit history of that card may be reflected on the user's credit report as well.

Don't close old accounts in order to improve your credit score. Since the FICO credit score takes into consideration how long a consumer has had a particular credit account, closing a longstanding account could damage the score. And since the formula factors in the ratio of used credit to available credit, closing an account will increase that ratio and could reduce the score.

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months.

How do I order my free report?

You can order your free annual credit report online at annualcreditreport.com, by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

When you order, you need to provide your name, address, Social Security number, and date of birth. To verify your identity, you may need to provide some information that only you would know, like the amount of your monthly mortgage payment.

Warning About "Imposter" Web Sites

The FTC advises consumers who order their free annual credit reports online to be sure to correctly spell annualcreditreport.com, or link to it from the FTC's website to avoid being misdirected to other websites that offer supposedly free reports,but only with the purchase of other products. While consumers may be offered additional products or services while on the authorized website, they are not required to make a purchase to receive their free annual credit reports.

 

 


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