By: Julia Aidan
Submitted: 2009-08-01 09:48:28 | Word Count: 568
Credit score has a great influence in your life when you are involved with some huge financial transactions. FICA credit score helps to evaluate a person's financial consistency and stability. It is a 3-digit numerical code. FICA Credit Score is calculated on the basis of data that is gathered from your credit statement or financial statement. Equifax, Experian and TransUnion are the three American credit offices that calculate your FICA credit score. Any bank, financial institution or credit card company checks your FICA Credit Scores so as to compute the credit limits and rate of interest each and every time you propose for mortgage loan, private loan, credit card or some other type of credit for private use.
FICA Credit Score ranges from 300 to 850. If you have a higher credit score, you obtain your loans easily as the risk involved is lesser. This helps the financial institutions or creditors to provide loans easily to their buyer with high credit score. For instance if you have a lesser credit score like 450, then the interest rate calculated is too higher. Thus there are chances that your application may be rejected outright. Whereas, if you have a good credit score like 760-850, you will get best rate of interest. This shows that if you have a great credit score it is possible that you may be provided the desired amount of loan easily.
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It is not that you won't be able to attain your loan if you have a poor credit score, but you will need to give thousands of dollars extra. On the other hand if you have a good credit score, you will be obtaining loans without spending much. In short, your FICA credit score reveals your ability of paying your debts on your loan. You should know that if you have a low credit score, your application may not be approved by any bank or lending institution. You are charged higher interest rates, asked for more security and you they may even conduct extensive asset and income certification. Thus, the lending and credit decisions depend on how good your FICA credit score is. Your FICA credit score helps the lenders or the financial institutions to know how safe (less risky) you are as a borrower.
Here are the five main elements on the basis of which your FICA credit score s evaluated, like your personal Payment record, Amounts owed in all, Length of Credit history, New Credit, Type of Credit you use. As your credit score is calculated primarily on your payment records and amounts owed, hence it is essential to maintain a good financial record regarding these two components. Here are some easy ways by which you can improve your credit score greatly.
- Make timely payments of all your debts,
- Maintain a balance lower than your credit limit,
- Pay higher than minimum payment,
- Avoid opening many bank accounts in short time span.
There are a lot of companies that offer you helpful tips to maintain a high FICA credit score. You are free to seek help from such online companies. Therefore, it is in fact good to maintain a higher FICA credit score for smooth financial deals in future.
Author Resource:-
Since FICA credit score is a measure of your credit worthiness, it’s obvious that you need to improve your FICA score and keep it high at all times. Lest you're in need of financing.
