Your FICO Score - do you know yours? You should.
FICO measures credit-worthiness.
Underwriters have determined that people with low FICO scores default on loans with far greater frequency than do their higher scoring peers, so they use three credit bureaus — Equifax, Experian, and Trans Union — to determine your score in several ways:
1. Late payments: A 30-day late payment is less risky than a 90-day delinquency.
2. New credit: Your score drops when you open several credit accounts in a short period, as you may be unable to meet new credit obligations. There is a risk that you could rack up lots of debt on each card.
3. A long credit history is better than a newly established one. It's wise to get a credit card as soon as you can, but with the plan to pay each bill off monthly.
4. A consumer with “maxed out” cards may have trouble with payments.If you have debt on a number of cards, it's hard to pay each one off each month.
5. Public records: Tax liens and bankruptcies jeopardize a healthy FICO score. Never a good idea to dodge taxes or file for bankruptcy.
6. The use of consumer credit counseling agencies may lower scores.
7. Small balances, no late payments show responsibility. Best to start with the practice of paying each bill off monthly. If you can't afford it, don't buy it.
8. Too many revolving accounts may mean over-extension.
9. Credit scores affect interest rates. Some lenders establish lower interest for high FICO scores and vice versa. This becomes very important on large purchases, like vehicles.
Find ways to make more money by a side hustle to fund expenses, but don't start a habit of buying a lot using credit cards that you can't pay off monthly. I know, it's easier said than done, but with a little self discipline, it is possible.
St. Petersburg, FL
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