What is a FICO Score and How Does it Affect Mortgages, Loans and Businesses?
A FICO score is a credit score that is used by lenders to determine a borrower’s creditworthiness. A FICO score ranges from 300 to 850, with higher scores indicating a lower risk of default. A FICO score is used to determine a borrower’s eligibility for a loan, the interest rate that will be offered, and the terms of the loan. A FICO score also affects a borrower’s eligibility for credit cards and other loans.
Improving your FICO score can help you get better loan rates, but it’s not easy. Here are five tips to help you get started:
1. Get a copy of your FICO score. You can get a free copy of your FICO score from the three major credit bureaus: Equifax, Experian, and TransUnion.
2. Check your credit report. Make sure you have copies of all of your credit reports. You can get copies from the three major credit bureaus or from a credit monitoring service.
3. Pay your bills on time. If you have a good credit history, your credit score will reflect that. Make sure you keep your bills paid on time and in full. This will help your credit score stay high.
4. Avoid credit card debt. If you can, try to avoid getting into credit card debt. This will help your credit score.
5. Keep your credit utilization low. This means that your total credit card debt, including both your credit card balances and your outstanding loans, should not exceed 30 percent of your total credit limit. If it does, you may want to consider reducing your credit card debt.
