Lets discuss credit scoring (FICO) and some useful pointers for everyone who is in need of credit. Credit scores or FICO range on a scale from 300 to 850 in the United States. If yours is lower than 620 then you are then considered by potential lenders as "high risk" also termed "sub-prime".
If your own rating is below that of 620 then it could well be that you will not only struggle to get the best terms and conditions with your loan or credit cards but you may struggle even to actually attain credit at all. This is because you are deemed higher risk the lower your scoring is.
If though your score is above the 620 level you will be deemed lower risk and as such will be offered better terms with your credit and quite frankly, you will be able to pick and choose who you borrow from with ease.
Just to shed a little more light on the importance of the credit points system - recently the Consumer Federation of America did some research upon the point system. They found that if everyone in the United States who is at all credit worthy (meaning old enough to attain credit) were to improve their own credit score by a mere 30 points, then the credit card annual bill for the whole of the United States would drop by a rather huge 16 billion dollars!
It would not be such a difficult exercise to bring your score up from say, 620 to 650, and thereby you will be going some way to really improving your credit rating just by doing this. To bring this up further though requires a bit more effort and a bit of knowledge too. Lets see how the credit ratings are worked out, shall we? The way your ratings are calculated are as follows...
# do you pay your credit cards or bills on time? This makes up 35% of your overall credit ratings.
# how much do you owe on credit currently? This makes up a total of 30% of your rating.
# how long is your credit history - generally this means the older you are the better your rating, although not entirely necessarily so. This adds up to 15% of your rating.
# what type of credit you have been using - some types of credit use is rated higher or lower than others. Equates to 10% of your rate.
# what sort of and how much credit have you recently applied for? Invariably affects your ratings to 10%.
So, just by looking at those points above, its fairly obvious where you need to focus the most to get your credit card score on the rise. First off, make sure to pay your bills on time. Secondly, do try to maintain your balance on any credit cards at a manageable level, ideally below 50% of the card allowance. Thirdly, if you have any cards that you do not use, then its best to dispose of them. Each small thing that you do will soon make a difference so its wise to be methodical and plan credit use carefully.
Its not the case that you have to have the very best credit rating to be offered some really excellent terms and conditions to loans of or credit cards. Anything above 720 and you are in really good standing.
And do remember that 720 is not so far off the 620 mark where you would perhaps struggle to even be offered some forms of credit, let alone be it on good terms. Try to plan ahead with your finances and keep within your own spending capabilities - only spend what you can afford to. This way you will be doing yourself and your credit rating a really decent favor indeed! - 29866
If your own rating is below that of 620 then it could well be that you will not only struggle to get the best terms and conditions with your loan or credit cards but you may struggle even to actually attain credit at all. This is because you are deemed higher risk the lower your scoring is.
If though your score is above the 620 level you will be deemed lower risk and as such will be offered better terms with your credit and quite frankly, you will be able to pick and choose who you borrow from with ease.
Just to shed a little more light on the importance of the credit points system - recently the Consumer Federation of America did some research upon the point system. They found that if everyone in the United States who is at all credit worthy (meaning old enough to attain credit) were to improve their own credit score by a mere 30 points, then the credit card annual bill for the whole of the United States would drop by a rather huge 16 billion dollars!
It would not be such a difficult exercise to bring your score up from say, 620 to 650, and thereby you will be going some way to really improving your credit rating just by doing this. To bring this up further though requires a bit more effort and a bit of knowledge too. Lets see how the credit ratings are worked out, shall we? The way your ratings are calculated are as follows...
# do you pay your credit cards or bills on time? This makes up 35% of your overall credit ratings.
# how much do you owe on credit currently? This makes up a total of 30% of your rating.
# how long is your credit history - generally this means the older you are the better your rating, although not entirely necessarily so. This adds up to 15% of your rating.
# what type of credit you have been using - some types of credit use is rated higher or lower than others. Equates to 10% of your rate.
# what sort of and how much credit have you recently applied for? Invariably affects your ratings to 10%.
So, just by looking at those points above, its fairly obvious where you need to focus the most to get your credit card score on the rise. First off, make sure to pay your bills on time. Secondly, do try to maintain your balance on any credit cards at a manageable level, ideally below 50% of the card allowance. Thirdly, if you have any cards that you do not use, then its best to dispose of them. Each small thing that you do will soon make a difference so its wise to be methodical and plan credit use carefully.
Its not the case that you have to have the very best credit rating to be offered some really excellent terms and conditions to loans of or credit cards. Anything above 720 and you are in really good standing.
And do remember that 720 is not so far off the 620 mark where you would perhaps struggle to even be offered some forms of credit, let alone be it on good terms. Try to plan ahead with your finances and keep within your own spending capabilities - only spend what you can afford to. This way you will be doing yourself and your credit rating a really decent favor indeed! - 29866
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