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Increasing your score FICO style

By Brian Anderson
Published: Saturday, October 24th, 2009

There are many materials you can find that would define for you what a credit score is and its importance to your financial life. You should by now know that the credit score is dependent on the information lenders and banks give to credit bureaus. The bureaus compile everything and come up with a report which is then transformed into a three digit number using a secret program. This is your score and you would need to keep it high always.

The most commonly used credit score is the FICO score. Most lenders and creditors rely on the score provided by Fair Isaac Company. However, you should remember that some lenders consider other factors aside from your FICO score when they decide on your application. One of the credit score tips you should keep in mind is to check out these factors and start managing them as well. For example, if you have a not so high credit score, you can present your lenders with a proof that you could improve, like having a higher paying job already.

However, it would still be important to consider some of the credit score tips that would help you up your FICO score. It is after all the most common score lenders use. The score is dependent on your payment history. That means that you should always pay on time. If you would be unable to pay on time, that should only be because an inevitable circumstance is on the way. Nonetheless, one of the credit score tips you should follow would be notifying your lenders about it and vowing to work things out. Another way to improve your score would be to get current on past due accounts.

When it comes to the condition of the amounts you owed, you should keep your balances low relative to your credit limit. If possible they should be at most 35% of your credit limit. On the other hand, you should be having too much capacity as well and avoid opening new accounts just to lower your used credit capacity.

Reliable credit score tips would also tell you to keep your old accounts open. This is because the length of time you use your credit is considered in the FICO score. The lengthier your use is, the higher your score gets. This signifies a well-built credit lenders love.

Apart from old credit, FICO also looks at your new credit. If you want to have a new credit, you should shop within a very short time frame. That means fourteen days or less. If you keep o shopping, your lenders would think that you are not capable of managing your present debts and you are looking for a way out. On the other hand, if you do have a bad credit history, one of credit score tips advises you to open a new account and manage it responsibly this time.

When it comes to the type of credit you use, make sure that you know what you are getting. There are differences in credit because there are specific reasons for them to be used. Understand that most credit score tips would tell you to get the installment type which has fixed monthly installments until the debt is paid. This is in contrast with revolving credit that piles up your dues. The former one is better, because you can prepare for your payments. But, if you can handle both types of credit, it is also recommended.

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