Achieving an excellent FICO rating you need to have control. Additionally, an individual have to be fimilar with what comprises a FICO rating. Knowing the FICO rating calculation will permit a person to make day to day decisions to get better and protect a rating.
The beginning section of the rating is the individual’s payment history to their lenders. It carries the largest effect because people that are delinquent have an increased rate of default. Negative entires against the rating are normally 30 day delinquent payments.
The second section of the FICO rating is the debt to credit ratio and this looks at how much an individual is in debt . The more an individual is in debt the higher risk they have to their accounts and the lower the possible rating.
The third section of a FICO rating is your credit history and considers the age of the accounts. Creditors like to see a long credit history and will also aid a person’s FICO rating.
The fourth section is your credit inquiers. An inquiry is when a consumer tries to get a new loan.
The final section is credit mix. This is the judgment of the types of credit an individual uses.