Financial advisors all agree that it is important to have a good FICO score? What is this score and why are people obsessed with it?
Basically your FICO score is a number between 350 and 850. It takes into consideration things like, how much debt you have, what your credit limit is, and how often you missed your payment or made a late payment in the past. Basically it indicated how likely you are to pay back your bills.
Why should you care? Lenders, landlords, and many other companies will look at your FICO score online when deciding if they should do business with you. There are a few different credit score ranges that people will look at, and if you happen to have a low score it will be harder to do things like taking out a loan or becoming a renter. Also if you do find a loan you will have to accept very high interest rates and all those things that you do not want to get with a loan.
If you want to avoid this you have to keep your FICO score high. Now that you know why a FICO score is important you are probably asking yourself how to build credit and if you are it will calm you to know that there are ways to fix a low score.
First things first, you have to know where you stand. If you don’t know where you stand you can get a free credit Score by going to annualcreditreport.com. But you can only check this site once a year. The other option would be to pay a company to give you that information, but if you do it can actually harm your score so it is best to not overuse this option.
Once you know where you stand you can start improving your score by taking on small debts from things like credit cards and paying them back on time. Having some good credit history on your side will definitely help. You can also report any information on your account that is just plain wrong. If the credit agencies can’t find proof for it they have to remove it helping your score.
