Improve Your FICO Score Now

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Author: Dewey Kearney

Article source: http://www.articledeshboard.com/. Used with author's permission.

Almost every site that has anything to do with credit talks about FICO scores or credit scores (they are the same) but a lot of people still don't understand what that is and if they have a low score how they can improve it. We will do our best to answer any questions about this and make it understandable.

What is the FICO (credit) score?
How is it computed?
What is considered a low credit score?
If you have a low score, how can you improve it?

What is the FICO score?

The FICO score is a credit score that was developed by the Fair Isaac Co. This method of scoring was developed as a means of determining how you as a creditor pay your bills. Fair Isaac began developing this method in the 1950's and since then this has become the most widely used method of evaluating credit. The Fair Isaac Co. or the credit bureaus don't reveal how they compute the scores.

Your credit score is computed using several factors.
· Any negative credit information such as collections, bankruptcies or charge-offs and late payments.
· How long is your credit history
· How long you have lived at your current residence
· Do you rent or own
· The amount of credit you use versus the credit available

Each of the three credit bureaus use a slightly different method of computing which explains the slightly different scoring. Also not all creditors report to all three bureaus. Some report to all three some to only one.

We heartily recommend that you check your credit report every six months or at least once a year without fail. Your credit score will not be part of this and you will have to pay a small fee to get this.

Here is the breakdown of how your credit score is calculated:

Your payment history: 35%
· This takes into account all your payments that are of course public record. Car loans, mortgages, your rent if your landlord reports it, major credit cards, store credit cards,
· Any bankruptcies, charge-offs,
· Any details of missed or late payments along with the time frame they occurred.

Amounts you owe: 30%
· The total amount you owe on all credit accounts,
· The percentage of this debt (how much is CC debt and how much is installment loans,
· The total number of accounts that have a balance owed,
· The total amount available on credit cards and other installments versus the amount of available credit,
· And the balance you still owe on installments loans like car loans.

Types of credit you have: 10%
· This takes into account the number of credit accounts you have and which types. This is very important if you are new to credit and have a short credit history.

How long is your credit history: 15%
· Providing you don't have negative information in your credit file, the longer your credit history, the higher your credit score.

New credit: 10%
· This factors in how many new credit accounts you have recently opened, how long that has been, how much credit you have applied for recently and what is the payment history on these new accounts.

Here is the way credit scores are calculated:

· 350-450 very poor
· 450-550 poor
· 550-650 fair
· 650-750 good
· 750-850 excellent

There, that wasn't quite as difficult as you imagined was it? Now the next question on everyone's mind is how can I raise my credit score? Let me show you the ways.

· Start by ordering a copy of your credit report.
· Review it carefully. The credit reporting agencies say that 79% of the reports contain errors. It's safe to assume that yours does too.
· Correct any errors. Start by verifying things, circling the errors on the report, find the documentation that proves the error, write a letter to the credit bureau explaining your side. Don't get mad and use profanity or abusive language but be clear. BE SURE TO KEEP COPIES OF ALL CORRESPONDENCE.
· If after a reasonable time (they have 30 days+ to reply) you haven't heard write again.
· If you get no response or the creditor challenges your proof consider hiring a good credit attorney. They will guarantee results or you don't pay. These people get results that you cannot get. Information for this is on our site.

That's it for the past. Now for the future to get the credit you deserve:
· Pay your bills on time. That means mailing it early enough to get posted before the due date.
· Keep your credit down on your credit cards. A recommendation is to keep your balance owed at 25 - 30% of the credit limit. Having your credit cards maxed out will have a negative impact.
· Don't open a lot of new accounts over a short period of time.
· If you have had credit problems in the past, open a few (1 to 2) new credit accounts and use them responsibly, be sure to pay early and pay them off in a timely manor.

How long will it take to show an improvement on my credit score?

Negative items will impact your score faster than the positive ones will. Be patient, if you have followed our outline you can expect results within 6 to 12 months. Possibly sooner.

For more help, see our resource box.

www.1-800BadCredit.com provides up-to-date information for people with bad credit. Providing auto loans, mortgages and refinance options, credit cards, credit counseling, personal loans, identity theft protection and advice & tips on saving, budgeting and getting out of debt. Founded by Dewey & Leslie Kearney who understand bad credit because they've been there too! www.1-800badcredit.com/credit-score.html www.1-800BadCredit.com Site dedicated to helping you find credit solutions