FICA Credit Score

Published: 03rd August 2009
Views: N/A

Your credit score is the greatest factors that is considered when you are dealing with financial services. FICA credit score aids to evaluate a person's monetary reliability and constancy. It is a numerical code with three digits. FICA Credit Score is evaluated on the basis of data that is collected from your credit report or monetary record. 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 determine the credit limits and interest rates each and every time you apply for Home loan, personal loan, credit card or some other type of credit for private use.

FICA Credit Score ranges from 300 to 850. If you have a greater credit score, you attain 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 low credit score like 450, then the rate of interest evaluated is too much. This may result in cancellation of your loan application straight away. On the contrary, if you have a better 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.

It is not that you won't be able to achieve your loan if you have a bad credit score, but you will have to shell out thousands of dollars extra. On the other hand if you have a good credit score, you will be obtaining loans without spending much. To round up, your FICA credit score shows your ability of paying your payments 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 greater interest rates, asked for greater security and you they may even conduct extensive asset and income certification. Thus, the lending institutions or banks check your FICA credit score before they sanction you any kind of loan. Your FICA credit score aids the banks or the financial institutions to know how safe (less risky) you are as a buyer.

Your FICA credit score is calculated on these 5 major components like your Payment record, Amounts owed in all, Length of Credit history, New Credit, Type of Credit you use. As your credit score is detrermined mainly on your payment history and amounts owed, therefore it is necessary to maintain a positive financial record considering these two components. Here are some easy ways by which you can improve your credit score greatly.

- Make on time payments of all your bills,

- Try and keep your balance lower than the credit limit,

- Pay greater than minimum payment,

- Don't open several new accounts in small span of time.

There are a number of companies that offer you helpful tips to maintain a high FICA credit score. You are free to seek help from such online companies. Hence, it is in fact good to maintain a better FICA credit score for easy financial transactions in future.

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.

Report this article Ask About This Article

More to Explore