| Credit Rating - What Can I Do To Bring It Up? |
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| Written by Joseph Archibald |
| Saturday, 14 November 2009 15:38 |
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If you are looking to gain some credit such as a new credit card of perhaps a loan, but you find that your credit rating is affecting your ability to attain this credit, what is there that you can do to change this situation to be more in your favor? Credit rating, otherwise known as a FICO score in the United States, are based upon a scale of between 300 and 850. In this case the higher the better.
If you are looking to gain some credit such as a new credit card of perhaps a loan, but you find that your credit rating is affecting your ability to attain this credit, what is there that you can do to change this situation to be more in your favor? Credit rating, otherwise known as a FICO score in the United States, are based upon a scale of between 300 and 850. In this case the higher the better. If you fall into this category then sadly you will be "labeled" as a bad risk and chances are high that you will denied a loan or credit card if you apply for one. If however, your score is higher than 620 then you will be perceived as a lower risk candidate and thus will be able to attain the loans and cards that you wish, within reason at least. And here is a fact for thought - the Consumer Federation of America did some research and found that if everyone in the US were to raise their credit score by as little as 30 points, this would reduce the amount of annual credit card bills by a massive $16 billion US! It would not be such a difficult exercise to bring your score up from say, 620 to 650, and thereby you will be going some way to really improving your credit rating just by doing this. To bring this up further though requires a bit more effort and a bit of knowledge too. Lets see how the credit ratings are worked out, shall we? The way your ratings are calculated are as follows... * the history or your payment such as being on time or otherwise = 35% * the total amount of money you currently owe on credit = 30% * total length of your credit history, so if you are older this does tend to be better = 15% * the recent type of credit you have used = 10% * the recent credit you have applied for = 10% The top 2 points are key to progressing to a healthy or otherwise credit rating so make sure you pay all bills on time (thus also avoiding any late payment fees). Further, try to keep your balance on any credit cards to a manageable level - this could be around 50% of the total card allowance or thereabouts. Its not the case that you have to have the very best credit rating to be offered some really excellent terms and conditions to loans of or credit cards. Anything above 720 and you are in really good standing. So even if you are on the border at the 620 mark its not such a long way off your real goal of 720. So the idea is to plan ahead and keep the spending within your capabilities and this way you will be doing yourself a really big favor! DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. You can learn more about credit card help and about a debt consolidation program to suit your needs. |