Getting an excellent FICO rating you need to be disciplined. In addition, an individual need to know what comprises a credit rating. Knowing the FICO rating formula will permit you to make correct choices to improve and protect a rating.
The first component of the rating is the individual’s payments to their creditors. This carries the biggest effect because people that are late have a high rate of failure to pay. Harmful entires against the rating are normally 30 day late payments.
The next component of the FICO rating is credit utilization and it reviews at how much debt a consumer has . The more a consumer is in debt the higher risk they have to their lines of credit and the lesser the potential rating.
The next component of a FICO rating is your credit history and is a measurement of how long a consumer has take advantage of lines of credit. Lenders like to see a decent credit history and will further help an individual’s FICO rating.
The next component is your applications for credit. An inquiry is when a consumer applies for a new line of credit.
The last component is the types credit a consumer uses. This is the judgment of the types of accounts a person has.