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Understanding a credit report

Your credit score is also called a FICO score.
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This stands for Fair Isaac Corp. Credit scores range from 300-850. 1“A “FICO” score is simply a numeric summary of the information in your credit report that represents your potential risk” The higher your FICO is the lower the risk you are, and more likely be approved at better rates then if your FICO was lower.

In my 13 years in finance I have seen 10 score above 800 but only 3 were actually 850 and these people had credit established for years, they had never missed a payment, there were NO bankruptcies, judgments, charge off’s, collections or late payments, and most of these 850’s age group was over 70 years old. It’s not that you can’t get an 850 FICO score, it just means that it will take a lot of time and effort to get that credit score.

So what is involved in getting a credit score? Well, a credit score is determined by a number of factors, which are (and are in no particular order) including the length of credit history, payment history, and the amount of debt currently owed, new credit, and types of credit issued.

Pay off your credit cards and other bills in a timely fashion. Late payment may be indicated on your credit file. In order to prevent this from happening, make sure you send out your bill payments early enough so that they’ll arrive at their destination on time.

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Always pay more then the minimum payment on your credit cards. If you only pay the minimum each month, it will take years to pay off all your debts. Carrying a high balance for a long time is a sign to creditors that you have stretched your budget to thin and have a hard time managing your money.

Never let your credit card balance exceed 50% of your limit. Keeping a low balance is a sign that you’re able to responsibly handle your debts.

Monitor your credit report. Regularly checking your credit report for changes you did not make is one of the best ways to combat identifies theft. You can go on line to and you can get one free credit report from each of the 3 credit bureaus. If you are a victim of identity theft you can go to

Keep older cards open- this will add to your credit history and shows how long you have had credit established. Pay off your credit card balances as soon as possible. By regularly clearing out balances, you demonstrate to potential creditors that you are able to handle credit responsibly.

Shred EVERYTHING. Especially those credit card offers that come in the mail that you choose not to accept. If you just throw it away a person who looks in your garbage can, can get that information with your name on it and they can open a card.

1-Your FICO score, a number between 300 and 850, is based on five criteria:


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