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There are very few things you can do before applying for a home mortgage loan that are of
course on credit cards. It can even determine IF you get the loan..
A FICO score is a composite of many historical factors (as many as 22) used by millions of
people to create a single score that is used by virtually all lenders to predict future behavior.
Of course FICO isn't everything. On the other hand as they say "it is way ahead of whatever
is in second place". Employers are using it to determine stability. Landlords are using it to
determine ability to pay timely and other factors associated with being a good tenant. Too,
lenders use it to determine if you get a loan and at what rate. Insurance companies use it to
determine what kind of risk you are
Improving your FICO score can help you:
· Get better offers for credit
· Lower your interest rates
· Speed up the approval process
· Save You Money
· Perhaps get a better job
There are several things you can do to improve your Credit Score: some are obvious, some
not so obvious. It takes a lot longer to repair your credit than it does to ruin it. So if you have
questionable credit NOW is the time to get going at fixing it. Lenders are looking for trends-
establish a new one NOW. They are looking for a long history managed well.
1. Get a Copy of Your Report and Review. Believe it or not mistakes are made. It is up to you
to get them corrected.
2. Pay Your Bills Timely. Maybe the biggest factor of all in determining your score.
3. Minimize Credit Card Applications. Don't open a lot of accounts at once-spread them out
over a year or more. I used to think the more the merrier-WRONG!
4. Don't Apply for Credit You Don't Need. Every time you apply it shows up on your report.
5. Keep Balances Low. The magic number seems to be in the 25-30% range of credit used to
amount available. So if you have an available limit of $10,000, keep your usage at
$2,500-$3,000.
6. Seriously Reconsider Closing an Account. It is better to use an account very occasionally
than close it.
7. Use Credit Responsibly. It will pay immeasurable dividends for you.
Check out www.myfico.com for a calculator using current rates. There is a wealth of
information at www.fico.org
For a single three digit number to have such an enormous impact on your life, it behooves
you to keep that score as high as you can get it. It will save you ton of money and maybe
even help you get a desirable job. Keep an eye on your score with regular monitoring and
use your credit wisely.
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