It is common knowledge that it is important to keep your FICO score as high as possible, but what is the reason for thi? What is this score and why are people obsessed with it?
The 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 different ranges of FICO Scores 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. If you do get a loan it will likely be a high interest rate loan and have a lot of disadvantages in the fine print.
In order to avoid this you need to keep your credit score high and be financially responsible. Now you might be wondering how to raise your FICO score and if you are there are a few things that can be done.
The first thing you must understand is where you stand today. If you have no clue what your credit score is you can find a free credit Score online by visiting 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. Building up a history of paying your bills will help. If you spot information on your report that is incorrect you can report it. If the credit agencies can’t find proof for it they have to remove it helping your score.
