Who uses your credit score?
You need to know what your FICO score is and why is it important to have a good rating. Your FICO score is used by a variety of institutions to report on your credit worthiness and your ability to pay your bills on time. It can be accessed by the banks, credit card companies, cell phone companies, insurance companies, mortgage lending companies, property owners if you rent your home, and even by a prospective employer who may check your score before offering you a job. Therefore, if you are going to have any dealings with any of these companies or financial institutions in the near future then you need to improve your FICO score rating quickly or you are going to end up paying more than you need to.
What determines your FICO rating?
Your FICO score is decided by the information held on you by the credit bureaus. This information is typically known as your credit report. It contains information about all your financial transactions and the money that you owe. Your FICO score is used as a method of determining whether you are likely to pay your bills on time and whether or not you are a good financial risk to them when applying to take out a loan or any other sort of finance.
What is a good credit score?
In the USA a typical American FICO score calculation produces results ranging between 300 and 850, with 300 being the absolute lowest and 850 being the best that you can possibly have. An average American has a credit score of 723. A score below 600 is considered a very high-risk score and you will end up paying more if you do not fix it quickly. A good credit score is anything above 620. Therefore, if your credit score falls below this figure you should consider trying to raise it as fast as you can. If you do not take immediate action, it will cost you a lot of money.
So there you have it, if you have a FICO score below 600 then you need to improve your FICO score rating fast. If you do not then you are going to have trouble being offered finance cheaply, or even being offered any at all.
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