Fix your FICO score today!!

02
December

One area of finance that the majority of Americans tend to ignore until it is too late is their credit score. Your FICO score, the most commonly used credit score model, will follow you around until the day your die. Many of us either don’t understand what it is, what value it holds, how it will affect us and even more, how we affect it. It is a common story to hear about an 18 year old destroying his credit score, but if that is you it is not too late to begin to get back those valuable FICO points that you have lost!

How does the FICO score influence my finances?

Your credit score may be the single biggest factor when it comes to getting a loan. Lenders look at all applicants from a position of risk. How risky are you? Your FICO score is the best indicator of how risky you are to a lender. A low credit rating can alter your life quite drastically. A low score almost certainly means that when you apply for a mortgage, auto loan, student loan or personal loan you will either have to pay a ridiculously high interest rate or even not get approved for the loan. A high interest rate can make your monthly payment on a mortgage go up a few hundred dollars a month, this is tens of thousands of dollars over the course of a 30 year mortgage!

In an even worse scenario, you don’t get approved for a loan due to a low FICO score, you may have to take out a ‘bad credit’ mortgage. These loans often have even higher interest rates than previously mentioned as well as extremely high front end fees.

How Can I Check My Score?

Now that you understand the importance of your FICO score on your financial health it is time you take a look! It is smart to use a credit monitoring agency so you can get updates on your credit report every month. Not only will this help you manage your score accordingly, but you will also have the opportunity to monitor for fraud under your social security number as well.

There are many credit score providers out there. Many of these providers claim that they are free services, but they are not. Using a trusted website like freecreditreport.com can help you see your credit score and entire credit file for free. This site will also send you monthly updates on your FICO report.

How Can I Repair My Score?

If you have a low score, it is not too late to change it around. The easiest way to change your low score is to look in to your credit file and see if there are any delinquent payments or payments sent to collections. Many times people have outstanding hospital or utility bills that they never even knew about that are bringing down their score! Settle these cases right away and you will see your score rise.

Now that you know the importance of a good FICO score on your financial health get to work on raising that number! It will save you thousands when it comes time to buy that home or take out a loan for your child’s college education!!

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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