Building Your Credit Score

For many people, credit score is a tricky little number. They really don’t understand what it is or why their number is what it is. Simply put, your credit score, also known as your FICO number, is a number that’s assigned to you by lenders. It indicates your ability to repay a loan. Check out for secrets to improve it.

Calculating Your FICO Score
Fair Isaac, the creators of FICO, start assigning people with this number once they have some credit. However, the company really doesn’t say how they figure this number. What they do tell us are the weights of the various numbers they use. These include:

35% payment history

30% amount owed

15% length of history

10% new credit

10% types of credit used
Maintaining a Positive Credit Score
When you’re first starting out and want to establish your FICO score you’ll want to open one credit card. Make sure you use this credit card to buy something small each month. Pay this off right away. You’ll then establish a good credit score for yourself within 3 – 6 months. Or go to
Once you have some credit, keeping it positive is essential. Only when you have good credit can you qualify for a low-interest credit. Fortunately, there are some things you can do to improve your credit score. You can:

Keep the balances on your credit card and other types of “revolving credit” low

Make sure you pay off your debts instead of moving it around

Don’t close credit cards you’re not using in hopes of quickly raising your FICO score

Don’t open a bunch of credit cards that you don’t need just to increase the amount of credit you have available to you

Fixing Your Credit Score
Sometimes life throws you a curveball. When the unexpected happens and your credit score suffers because of it, you’ll need to fix it. There are a few things you can do here, including:

Dispute any errors

Pay bills on time

Pay down old balances

Don’t apply for any new credit cards
Remember, your credit score is important. Never neglect it because you don’t know when you’ll need it in the future.

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