What Does FICO Credit Score Mean?
As citizen's who are part of a bigger economy, we can avail of benefits such as loans from credit institutions to buy houses, cars, or for other purposes. Credit institutions lend people money and will check credit scores of applicants who want to borrow. These credit score ratings will be able to reflect whether or not the lender will lend the applicant money or not. FICO Credit Score is basically an acronym of Fair Isaac Corporation which is a company that created the credit score estimator to show a person's credit score rating. Overall, if a credit score estimator rates your FICO credit score at a range of 650 to 850 points, this shows a person has good credit. If your score goes below 650, this is a poor FICO credit score which may end up with the company turning down your application.
After getting my FICO score from a credit score estimator, what does it mean?
When your FICO credit score is calculated by a credit score estimator, it reflects the information that exists on your credit history and report. Having a higher score is a very good sign which will open up a lot of opportunities for lenders to lend you money. Your FICO credit score is a reflection that you will pay your bills in full and on time. With a high FICO credit score, you may be given the opportunity of availing of loans at very competitive rates with low interest on pay back. Banks will place you in a group of desirable and potential clients for present and future loans and you can even get instant approval on your application.
Is there any way of repairing credit score?
If you have a FICO credit score rating that is below 650, here are some ways that you can repair it by doing the following:
- If there is an obvious mistake in the credit score estimator's calculation of your FICO credit score, fix it immediately! Report the change to all credit bureaus so that they can fix the mistake. This should take 1 to 3 months to remedy.
- Always be prompt in bills payment. A missed or late payment will make your FICO credit score go down.
- Keep your credit card balances below 25 percent of your allowable limit. A big consideration in computing your FICO credit score is based on how much you owe on your credit card.
- Opt to pay off your debts instead of transferring them. Moving your balances around to different banks will only worsen your FICO credit score.
- When you are planning to make a loan and you have unused credit cards, don't think of closing them out yet. Also, try not to open new accounts when approaching your planned loan time.
