Against the background will have a deteriorating economy, would-be borrowers an increasingly difficult time ever approved for home and car loans. Although you can not control how the banks set their lending criteria, you can control how your credit score and forms - and the first step to improve your score, learn how it is calculated.
Called your credit score, as FICO score, is an indication of your creditworthiness, which is a simple three-digit number indicating the amount you can borrow and the interest you pay is determined.
FICO scores from 300 to 850, and the rule of thumb is, the higher your FICO score, the better your loan approval conditions. A higher FICO score translates higher lending limits and lower interest rates, making it definitely a good idea to check your FICO score as healthy as possible.
It's called a FICO> Score, because the number is based on a formula by the Fair Isaac Corporation, has been developed. You start by getting an overview of all your credit accounts, including mortgage, auto and personal loans, store cards, and of course credit cards. The focus is on the repayment of the story: You have missed many payments, or bill for late payments? They have debts that you never repaid?
In general, a more than 700 guests as a good result. To achieve this,must regularly on-time repayments on all your invoices, manage to ensure at least one or two credit cards, you keep your balances low, maintaining high credit lines, so that your debt-to-limit ratio seems strong, and regular monitoring of your FICO score to correct erroneous transactions that are recorded.
Your score is calculated on a very specific formula, so you remember the next time you consider closing an account or reduce your credit cardlimit:
35% is based by your repayment history.
30% is based on your total credit card limits, as compared to your total debt balances.
15% is based on the length of your credit history - including the length of time you've had each account open, and the level of activity on each account.
10% is based on inquiry levels, ie. how many accounts you've recently opened or tried to open, compared to your total number of accounts.
10% is based on the various lending facilities It manages. How do you handle revolving credit card debt, for example, is stronger than a fixed debt and repayment system, weighted like a home loan.
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