A Good Credit Score

A Good Credit Score

A Basic Understanding of My FICO Score

Knowing your credit score is an important thing, but that knowledge is absolutely useless unless you understand what the score means. If you don’t have knowledge of how to increase credit score, you will never be able to compete in a financial world that requires credit.

All of the financial and credit-related decisions that you make combine to create your credit score. When you take a look at your credit FICO report score, you will see that things like your use of a secured bank card or a portable mortgage will impact how the generic scoring models calculate your score. Both positively and negatively, the things you do can impact your credit report FICO score and Experian FICO score for a long time.

Credit Cards and My FICO Score

As you probably know, credit cards have a big impact on your credit score. Irresponsible use of credit cards is the thing that sends all three credit scores into the dump. From the FICO Experian score to the other credit bureau scores, the impact is huge when it comes to credit cards. This is because your credit cards require constant attention, each and every month. For the majority of consumers, the payment amounts are going to be small, but they do require attention.

With that in mind, consumers have a chance to positive impact their FICO free score with their credit card use. When consumers come in and ask “how to raise my credit score”, the majority of credit repair clinics will tell them that getting a small credit card and paying the balance each month is a great way of fixing credit score problems.

On the flip side of that, credit cards can get people in trouble, as well. The number of people who come in and complain that “credit cards killed my FICO score” is astonishing. This is because each time you miss a payment or you are late on a payment, your score takes a hit. When I go online to find out my credit score, I might find that it is substantially lower than it should be simply because I missed a couple of payments a while ago. In addition to that, the amount of credit devoted to credit cards is important.

If you have too many credit cards (anything more than three), then you will be seen as something of a credit risk for lenders. It is always best to only have a couple of cards and use them as responsibly as you can.

By the way, there isn’t really a way to obtain a free FICO score, so you can expect to pay about $15 to get a credit FICO report score.

Loans and My FICO Score

There are lots of different loan types, and each of them impacts your 3 bureau credit score in a different way. If you want to raise FICO score for all of the credit reporting agencies, then you absolutely must keep your loans in good standing. For the most part, student loans and mortgage loans are stable credit types than show your strength of credit to the creditors. If you are able to effectively manage and pay these two types of loans, then your credit bureau data will create a favorable impression for future lenders.

The other side of that has to do with the size of these loans. Mortgage loans, in particular, are large loans. If you do happen to fall behind on one of these or you happen to go through voluntary repossession, then your credit score will take a major hit. My FICO score is strong because of a long standing mortgage loan, but I’d shudder to think of how low it would go if I were to default on that loan. In addition, consumers would be smart to keep track of personal loans like they do a credit card. These loans are much more unstable and if you lose track of them, your FICO credit score will struggle.

Credit Inquires and My FICO Score

Many consumers are not aware that each time they apply for a credit card or a loan; it goes on their credit report. Regardless of the result of the credit inquiry, my FICO score will be impacted simply because I filled out the paperwork. This is why I turn down those obnoxious offers of free t-shirts that come as a result of applying for a credit card.

If you apply for too many loans or credit cards, then lenders will sense the instability and your FICO credit report score will reflect that, as well.

Even worse for your credit score is being turned down for credit offers. This hurts your score just slightly worse than a credit inquiry, but if you establish a pattern of being turned down for this type of loan, you will find that your credit score dips by 20 points or more.

How Credit Balances Affect My FICO Score

It is not good to use up all of the credit on your credit cards. As a general rule, if you are using more than 50% of the available credit on a card, then your score will take a dip. This is especially true for larger cards, where those balances are even more substantial. Card credit FICO score consequences are serious, and they are often overlooked.

Carrying a small balance on a credit card is a good thing, because it allows you to establish a positive re-payment history each month. When you start using up all of the credit at your disposal, you become a credit risk. In the end, that is really what my FICO score is intended to do. It lets lenders know what sort of risk level they are dealing with, so they can make the appropriate decision.

The Serious Stuff My FICO Score Killers

While missing payments and having high balances will impact your credit score some, nothing will hit it harder than serious things like tax delinquencies, bankruptcy score filings, repossession of your property, or a serious loan default. If you are forced to go through bankruptcy, then you can expect that the next time you use a FICO calculator, your score will be in a very low place.

The FICO score range for people who have gone through these things is usually 500-600, which makes it very tough for those folks to get a loan. If you have gone through one or more of these serious credit instances, it is usually a good idea to consult credit repair firms to get an idea of the fight you have in front of you.