What a FICO Score means

 Do you know what a FICO Score is?

Credit scores can be one of the most essential numbers of your life. A credit score is a number that signifies the apparent creditworthiness of an individual. It is based upon a variety of contradictory factors, including the records of prior obligations that are contained on a credit report. It takes into consideration both the positive and damaging factors, the quantity of credit offered vs. the quantity of credit that is utilized and all open or revolving accounts. Raising your credit score is the chief goal of credit repair. Credit Crisis Concerns? Get 20% off FICO credit scores now


The most generally utilized and most well-known credit scoring system in the United States is the FICO credit score. The acronym FICO stands for the Fair Isaac Corporation. There are also other businesses that perform credit scoring, however, none are so well-known as the FICO score.

FICO scores are contemplated to be one of the best predictors of creditworthiness because it only takes into deliberation fair and objective measures such as past credit history, how you deal with your credit and the present debt load.




The credit score is often the thing that lenders depend on most to establish if you will be able to acquire a loan, the credit limits on that loan and the interest rates. Repairing and improving your credit and increasing your credit score can be very helpful for you and your finances.



When you start to repair your credit you will need to get a report from all of the three major credit reporting agencies, which in the United States are TransUnion, Equifax and Experian. Each business will have their own credit report and their own score so it is critical to get a report from each of them. You are entitled to one no cost credit report each year or you can also get a tri-merged credit report that comprises all three for a fee.

You will need to make sure that your finances are in order and that you are making all of your existing expenses on time. Another key factor to your credit score is the amount of credit you have available and the amount of credit that you have used. If feasible try to pay down your balances to not more than 20% of the current line of credit and keep it there.




Another factor for your credit score is the duration of your credit history, so use only the credit cards that you have had the longest. A brand-new credit card is not useful and may even be damaging to your credit score. Do not apply for credit because every query dings your score by a percentage. If you no longer wish to utilize your credit accounts just pay them off but never cancel them because that reduces the amount of credit accessible to you and consequently lowers your credit score. Suze Orman's FICO® Kit Platinum



In a rather brief period of time, less than 6 months generally, you will have made quite a bit of progress on your credit repair. Make all of your payments on time and use the credit you have very cautiously. Check for any errors or discrepancies that you can dispute on your credit report and it will not take long for your credit score to be improved and your credit rating repaired and improved.





Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages www.beingbrokesuckstoday.com and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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It really doesn’t matter how you got here, nor why you have decided to repair your credit history. The important part is you are ready to do it. I highly recommend that you bookmark this article or print it out. You will want to refer to it often. You will also need a pen and paper to take notes.








Before you can worry about repairing your credit history you must first get your affairs in order. You can only accomplish this by first getting organized. So let’s begin by creating a list of your current income. This means including everything from government checks to pension checks. Now that you know what you have coming in on a monthly basis it’s time to figure out your expenses such as car payments, school loans, utilities, rent etc. This is considered a balance sheet and by putting one together you will have an excellent idea of exactly where you are going wrong with your personal finances.




Your next step is to directly contact the creditor. If you were previously a good customer in most cases the creditor will be willing to work something out with you. This is an important step towards repairing your credit history. Once you and the creditor have come to an understanding do not forget to request that they remove any negative mark that they may have placed on your credit report. You will always want to get your mutually agreed upon agreement in writing. It will be a lot easier if you write up the agreement and send it to them along with a self addressed stamped envelope.




If you have a damaging history of delinquencies, and a poor credit score, I recommend that you write to the creditor asking them to change any charge-off to a, “paid as agreed”, or “paid in full, on-time.” The same strategies that I am sharing with you right now will also work with collection agencies and credit attorneys as well. The most important thing about using this technique is to remember… DO NOT SEND ANY MONEY UNTIL YOU HAVE AN AGREEMENT!!! In the past I have had students send a payment in with the agreement letter just to find there self standing in front of a judge, and worse than that they lost the case and ended up spending more money.

With your agreement in place you are moving in the right direction. You can keep up the good work by starting a new line of credit. This is a strategy that is often over looked and that can immediately increase your credit score by 150 points. In order to start a new line of credit all you have to do is get a secured credit card, secured loan, or a car loan. Out of the methods that I have just mentioned obtaining a secured credit card is by far the easiest one. It is also important to note that you should never let your balance go over 20% of the maximum credit offer. Get Equifax Credit Watch Gold 3-in-1 Now!

The strategies that I have just shared with you will indeed help to repair credit history, however it isn’t enough. You will also want to correct some errors that you currently have on your credit report. If you were to listen to the media you would believe that the best way to repair your credit is to use a credit repair agency. However if you were to to believe the Federal Trade Commission (which would be a wise choice) they explain that there is nothing that any other agency can do for you that you can not do for yourself. In fact they recommend that you do repair your own credit.

Do you understand credit scoring?

How do credit scores work?

As a refresher for you and my readers to help improve your FICO credit score, below are the five factors that go into its calculation:

1. Paying on time: This represents 35 percent of your score. Payment history is the biggest factor for determining your score. This category includes the number and severity of any late payments. Payments of 120 days or more are the worst. The more credit problems you have, the lower the score.

2. Amount and type of debt: These make up 30 percent. This includes the total amount you owe, the amount you owe by account type such as revolving, installment or mortgage, the number of accounts on which you're carrying a balance and how much of the credit lines you have drawn down. Using your entire credit limit on a card lowers your score. Having credit cards with no balances ups your score. Free FICO® Credit Score Estimator

3. The length of time you've been using credit: This encompasses 15 percent of your score. This one you can't do much about today. But "paid as agreed" accounts that have been open for at least two years will help to increase your score.



4. The variety of accounts: This element represents 10 percent. A mix of credit accounts is good, but riskier types of credit will mean lower scores. For example, if most of your debt is in the form of finance-company loans, your score will be lower than if your debt is from student loans and mortgage loans, all other things being equal.



5. The number and types of accounts you've opened recently, generally in the last six months or so: These generate 10 percent of your score. Opening new accounts raises the question, "Can you afford a greater debt load, and also why have you opened them?" So, initially your score will go down. Once you show you can handle the new credit, the new credit will help your score. Credit Crisis Concerns? Get 20% off FICO credit scores now

To learn more about your credit score, better understand the factors affecting your score and what you can do about them, I suggest you go her Fico Scores/Reports. Fair Isaac Corp., the FICO score firm, has recently redone its Web site and has some excellent new educational features that you may find helpful. Finally, I want you to go to AnnualCreditReport.com to get a free copy of your credit reports and make sure there are no errors on them that are hurting your score. Around 20 percent of reports have some errors and yours may be one!
Finally, you will need to balance your desire to have a home now with the home and mortgage that you can afford with your current credit score. In today's tight credit environment, it will be super-hard and super-expensive to get a mortgage with your current credit. My advice is to work on rebuilding your score and wait until it improves before shopping for a home.