It is important to establish your creditworthiness as early as now to get the highest credit score. If you live in the United Sates, you know how important a credit score is to your life. The score represents your worthiness as a borrower and also your character as an individual. This system was introduced by the Fair Isaac Corporation also known as FICO. Although there are different kinds of financial scores, the FICO score is probably the most widely used and popular credit scoring system in the United States. In the FICO system, the score range is between 300 and 850. The highest is 850 while the lowest is 300. Everybody should aim for 850, which is not impossible as long as you know how to manage your finances well.
Getting the highest score is actually very easy. You should know how the score is broken down into several components trực tiếp bóng đá kèo nhà cái . Your score is based on your payment history (35%), credit utilization (30%), length of credit history (15%), types of credits (10%), and credit inquiries (10%). As you can see, payment history is the biggest factor that determines your score. You have to make sure that you pay your bills on or before the specified due date to avoid having a delinquent account which can have a negative effect on your credit score.
There are some benefits of getting the highest. Some of them are listed below.
• Having the highest credit score or even a good credit rating will help you get approved with your loans such as mortgage or auto loans. Unless you are going to pay for your house or car in full in cold, hard cash, you should first make sure that you have a good credit standing. Otherwise, forget about buying a house or a car and concentrate on improving your credit rating first.
FICO is an acronym for the Fair Isaac Corporation. FICO ranking is actually the evidence of your credibility or the credit history. Majority of the financial institutions sanction loans at low and reasonable interest rates provided, your credit score is extremely good. This is the primary reason behind the significance of the credit score rating.
You can easily determine the score, if you know the status of various parameters, which affects the score. Rating can also be determined with the help of the credit card calculator. This is indeed a less cumbersome process. Calculations must be perfect, without any erroneous data.
You must knowledge regarding the calculation of the score, which is done on the basis of several parameters. Payment record (35%), owed amount (30%), length of the credit history (15%), new credit 10%), various types of credits used (10%) are the important elements of the credit data, which helps to determine the score. The respective percentages in the brackets represent the degree of importance of the corresponding parameter.
Generally, all of the above mentioned parameters are taken into account for credit rating. However, there are some exceptional cases as well. Concept of payment history is not considered for teenagers or for people in early twenties. In all other cases, this is one of the most vital factors, without which the score cannot be computed accurately or precisely.
FICO score can range between 300 to 850 points. Score above 620 is considered to be of high-quality. High score gives an assurance to the creditors that the borrower is a trustworthy person, who will be in a position to repay the loan. Payment history is a factor, which is directly correlated to your score. It is clear that, high credit score is an indication of lower debts no delay in the payments. Payment record accounts for 192.5 points. Full points are added in the score if payment history is brilliant.