Who knew that a three digit number could determine so much about one’s financial fate? It turns out that the three digit number known as your FICO credit score does have this level of impact. It can determine if you are able to get your hands on a vehicle loan or even take out a mortgage. Shelter and transportation are so elemental parts of how we live, and your FICO credit score weighs heavily on your ability to get these necessities.
How Is A Credit Score Calculated?
The exact formula behind how a credit score is calculated is known only to a select few people within the credit ratings agencies. There are three such major credit ratings agencies in the United States, and even within those agencies only a few people have some grasp on the exact formula used to derive the credit score.
Even though it is complicated in terms of how the score is arrived at we do know a few things about how they come up with this number. It is meant to reflect your credit-worthiness and thus relies heavily on your history of paying back your debts and also on how much debt you are carrying around in general. The length of your credit history also matters because lenders want to lend to someone who has had a decently lengthy credit history before lending money out themselves. Keeping your credit score high means paying your debts on time, keeping the amount of debt that you are carrying within reason, and allowing time for your credit history to expand.
What If You Credit Is Already Not Great?
A lot of people only start to get a grasp on what their credit score is and how it impacts them when they come to realize that they do not have a very good credit score. They are suddenly woken up to the fact that there are some changes that need to happen.
You can get a jump start on getting your credit score back towards respectable territory if you get with a credit repair company and let them work on this issue for you. They will dive in and look for errors on your credit report and work very hard to make sure that they get any negative or derogatory remarks taken off of your report. That alone can help you start to transform your number.
Make The Changes Now
Understand that allowing your credit score to continue to languish in poor territory is simply not acceptable. Those who have bad credit scores like that need to understand that they are paying more in terms of interest rates on the debts that they do have. People can start to reverse this if they get a little bit of help with their credit scores. A credit repair company makes this happen a bit faster than would otherwise be possible without their help. There is a real monetary cost to not repairing your credit, and that is something that you need to pay attention to.