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How is My FICO Score Calculated?Your FICO rating is created from the information in your credit report. Your credit report contains information such as your identifying data, your debt history, and your repayment history.
Late bills, unpaid bills, defaulted loans, many loan applications, bankruptcies, lots of debt, and short relationships with lenders can all lower your credit rating. Paying bills on time, having a reasonable amount of debt that you repay, and staying with the same lenders (such as the same credit card companies) over longer period of time can all raise your credit score.Why Don't I Know my FICO Score?
Many customers do not know their own credit rating. This is because credit bureaus are not required to send out credit information to customers. Unless you ask to see your score, you may never see it. However, if you ask to see your credit score, the credit bureau by law needs to allow you to see your credit score and your credit report, if you wish. In some states, you are allowed one credit report free from each credit bureau annually. You can take advantage of this right to make certain that your credit history is being reported accurately.
Can I Affect my FICO Score?
The good news is that you are not just stuck with your FICO rating. By taking specific actions, you can improve your credit and enjoy the better rates and better loan terms that a good FICO rating can offer you. To begin, you will need to learn what your FICO score is. Many credit bureaus will offer you free FICO scores, especially if you have not checked your score before or if you have recently been turned down for a loan. Many online companies also allow you to look up your free online FICO score, so that you can learn what your credit is.
When you get a number between 300 and 850, you may well wonder what is a good fICO score, anyway? In general, the higher your credit rating, the better chances you have to get the best financial benefits. However, even if your credit rating is already high - if you have a score of 760 or above- a few small changes can improve your score and give you even greater benefits. Just as even small interest rate differences on your mortgage can mean big savings
over time, so small changes to your FICO rating can save you a lot of money on loans over the years. It pays to keep your FICO rating as high as possible.
Once you know your FICO rating, you can do several things to improve your score. For example, you can report any mistakes that are on your credit report to the credit bureau. Once the mistakes are fixed, you will enjoy a better credit score. You can also close some of your more recent credit accounts and work to repay your debts. Over time, paying all your bills on time can also have a dramatic impact on your FICO rating.
Now that you know what your FICO rating means, you have the information you need to safeguard your money. Checking and improving your credit rating can save you thousands of dollars in interest rates and can qualify you for the loans you need. If you don't know your FICO score, you owe it to yourself to call the credit bureaus today to find out.
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