As many of us are all-too-aware, there are many things which can affect our credit score, whether positively or negatively. Every purchase you make, every line of credit extended, and even the amount that your credit balance sits at each month, all affect your credit score.
If you’re reading this, chances are that you have thought about either purchasing a home, or refinancing a mortgage recently. One of the key factors in determining whether or not you can move forward in these endeavors is your credit score.
What is a FICO score?
Your FICO score is a history of all of the payments, debts and accounts that you have ever held in your life. Recent events are weighted higher than older ones, as people can change.
If you have a history of missed payments, bad purchases, or high balances, chances are your FICO score will be pretty low. Anything below 620 is generally considered “poor” credit, usually barring you from (or making it exceedingly difficult to) refinance or home purchase. From 620 to 689 you are generally considered to have fair credit. 690-719 is considered good credit, and 720-850 is considered excellent. (850 is the highest credit rating a person can have)
What can I do to improve my FICO score?
If your FICO is down in the dumps, the first best thing to do, would be to take a look at your credit report and actually pay the $7 or so for a credit score. This will help you find a place to start. From there, do these 3 things:
· Check for inaccuracies or overdue payments you were unaware of. If such events exist, get the items scrubbed from your records, in the case of payments you were unaware of, try negotiating to have them delete the record for payment. (Make sure to get this in writing, that they will delete the event from your credit history.)
· Make certain that you don’t have an overdrawn account or excessively high credit account. They will punish you for this one, the good thing though, is that it is easily taken care of, just pay down your cards.
· If you do have a large amount of money owed, or a large number of items on your credit report, pay off the most recent events first, ensuring thatyou attempt each time to work with the company involved to have the event taken off of your credit report.
This list isn’t meant to be exhaustive, but rather a good place to start. If you are having credit troubles, don’t fret. Credit scores, just like your situation, can change for the better, and with time and attention, they most certainly will.
If you have any questions regarding your credit, or how to mitigate debt, please give us a call at 801-223-7060. In the meantime, please have a wonderful week! Take care!
