FICO is the most usual credit score used by determining the financial health of a person. The scores are in the range of 300 ? 850 which is calculated on precise mathematical algorithms. Individuals that have a score of 700 and above are able to access the lowest rate of interest on all loans and therefore credit scores are crucial for each individual.
On the other side, those with scores of less than 500 find it very inconvenient to get a loan. Even if they do, they have to pay through their nose for high rates of interest. Simply by paying all bills and installments on time, the credit score can be improved.
Within a month, the increased credit scores can be seen easily. Another tip is to keep the credit card balances extremely low. In fact individuals should aim at keeping it below the 25% credit loan limit otherwise it impacts the score negatively. Further huge credit card debts can easily reduce the score by up to 70 points.
Another way to improve the score is by paying off all types of outstanding debts, which includes both secured and unsecured loans. The sooner it?s paid off, the credit score will improve in the same league. Further outstanding debts carry huge monetary fines that can further dent the credit report.
Even if the outstanding debts have been paid off, to ensure that the credit score stays high, the accounts should never be closed. The longevity or the long duration of all open accounts that don?t have a negative status increases and improves the credit score of an individual.
Mistakes and errorsshould be instantly reported and this will help in improving the credit scores. A higher credit score is essential if the individual want to take further loans in the future.
James provides resources for those who want to know how to improve credit score. James also has great tips on how to improve your credit score fast.
Source: http://articles-maniac.tk/tips-to-improve-the-credit-score/finance/credit/
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