Achieving a good FICO rating an individual needs to have control. Furthmore, a person must be fimilar with what comprises a FICO rating. Understanding the FICO rating calculation will allow a person to make daily choices to boost and protect a rating.
The first section of the rating is the consumer’s payment history to their creditors. It has the biggest influence since consumers who are late have an increased rate of default. Harmful items against the rating are normally 30 day late payments.
The second section of the FICO rating is credit utilization and it looks at how far a consumer is in debt . The more a consumer is in debt the greater risk they have to their lines of credit and the lower the potential rating.
The third section of your FICO rating is your credit history and is a measurement of how long a person has take advantage of lines of credit. Creditors prefer to have a long credit history and will further help an individual’s FICO rating.
The next section is your credit inquiers. An inquiry is when an individual applies for a new loan.
The fifth section is credit mix. This examines of the kinds of credit a consumers uses.