| The credit score (FICO) ranges from 300 to 850. The | | | | 4) New Credit - 10% |
| cutoff for most lenders is 620. Anything lower than this | | | | 5) Types of Credit Used - 10% |
| is considered high risk or subprime. If your score is at | | | | There are several simple things to be done here to get |
| this range or below, then you are considered a bad | | | | that credit score on an upward trend. First, pay the bill |
| risk and will most likely be denied a loan. On the other | | | | on time. Use online bill pay if possible, but make sure |
| hand, the higher that your score is, the more likely you | | | | that you pay 4 - 5 days ahead. This will ensure a |
| are to be considered a good risk by lenders. A report | | | | timely payment. Next, try to keep the amount owed |
| by the Consumer Federation of American estimated | | | | less than 50% of the credit cards allowance. Also, get |
| that by raising their credit scores by an average of | | | | rid of any inactive cards or use them to make small |
| only 30 points, consumers could save approximately | | | | purchases and pay them off on time. Each little thing |
| $16 billions dollars per year. That sounds very plausible | | | | that you do affects your credit score, but by making |
| indeed. | | | | small adjustments in how you purchase items and pay |
| Now to raise a credit score from 620 to 650 would be | | | | bills, it adds up quickly. |
| considered good, but getting into the 700's will take | | | | Remember, you don't need a perfect score to get the |
| some work. That is not to say it can't be done, but | | | | best interest rate. Typically a score between 720 and |
| more effort is needed to make that kind of a leap. | | | | 850 will qualify you for the best rate. So if you are at |
| Here is the breakdown of how a credit score is tallied: | | | | the 620 mark, only 100 additional score points will |
| 1) Payment History - 35% | | | | achieve this goal. That is certainly attainable if you get |
| 2) Amounts Owed - 30% | | | | on a program and stick to it. Your future is what you |
| 3) Length of Credit History - 15% | | | | make of it. |