Fico Score, What is it, And Why Should You Care?
Everybody seems to stress the importance of having a good FICO score, but why would they? What is it and why is it considered important?
The FICO score is a number that is given to every person in America. It is basically a score between 350 and 850. It takes into consideration things like, how much debt you have, what your credit limit is, and how often you missed your payment or made a late payment in the past. Basically it indicated how likely you are to pay back your bills.
Why should you care? Lenders, landlords, and many other companies will look at your FICO score online when deciding if they should do business with you. There are some FICO score ranges that people will look at, and if you happen to have a low score it will be harder to do things like taking out a loan or becoming a renter. If you do get a loan it will likely be a high interest rate loan and have a lot of disadvantages in the fine print.
In order to avoid this you need to keep your credit score high and be financially responsible. Now you probably are asking yourself the question how to build credit and if you are you can rest assured that it is possible to fix.
First of all you must know where you stand today. If you don’t know what your credit score is you can get a free credit report online by visiting annualcreditreport.com. However you can only check this once a year. The other option would be to pay a company to give you that information, but if you do it can actually harm your score so it is best to not overuse this option.
Once you know where you stand you can start improving your score by taking on small debts from things like credit cards and paying them back on time. Having some good credit history on your side will definitely help. If you spot information on your report that is incorrect you can report it. If the credit agencies can’t find proof for it they have to remove it helping your score.