What's In Your FICO Score?
By Ed Vegliante
Obtaining copies of your credit reports
from the three major credit reporting bureaus is a must for all American
consumers. If you order your copies directly from each bureau, you can get
yours for free [once per year per bureau]. That is the law. There is,
however, one piece of information not included with your credit reports and
that is your FICO score. Your FICO score can determine several things,
including what interest rate mortgage lenders will charge you and the rate
you will pay for your credit cards. For just a small fee you can order your
FICO score and get a hold of a piece of information that is critical to you
fully understanding and improving your credit rating.
FICO, or Fair Isaac Corporation, is a score that helps determine
what interest rate creditors will charge you. The higher your score, the
lower your interest rate will be resulting in lower mortgage payments and
more money for you. Indeed, when you apply for a new cell phone account,
purchase a car, or make just about any type of credit application, your FICO
score is obtained by creditors. Unfortunately, you typically do not know
what that score is unless you get the information yourself. Don’t count on
creditors sharing that information with you!
Your FICO score is based on five determining factors. According to
the Fair Isaac Corporation, these five factors are weighted differently and
each one is assigned a percentage figure based on their importance.
Specifically, they are:
1. Payment History – 35% 2.
Outstanding Balances – 30%
3. Length of Credit History – 15% 4. New Credit – 10% 5.
Types of Credit Used – 10%
Obviously, if you have made several
late payments and owe a large amount of money to your creditors, your FICO
score will be much lower than the person who pays what they owe on time, has
a manageable level of debt, and possesses a solid credit history.
Coupled with your credit report, your FICO score can help you
determine the plan of attack you need to take to improve your credit
standing. This is very important step to take especially if you anticipate
making any sort of credit application within the next year. If there are
errors in your credit report than these will lower your FICO score. Make
certain that the three credit reporting bureaus correct each error now and,
once amended, run your FICO score again to determine if it has been adjusted
Remember, the higher your FICO score, the lower your monthly
payments will be on virtually everything you finance through a creditor.
Order your free credit report today and pay a little extra to obtain your
Ed Vegliante runs
www.Credit-Card-Surplus.com, a credit card directory enabling the consumer
to compare and Apply For Credit