My credit score

My friends have always asked me how I have been able to maintain my credit score. I always tell them that the steps are simple, as long as they make sure that they do it the right way. I start off by telling them that their credit rating is calculated based on the standards of FICO or Fair Isaac Corporation. Then, I advise them that they should learn more about these standards so that they will know which factors influence their rating.

I tell them that there are five categories within the FICO standards, which are used to calculate my credit score. These are:

1. The history of my monthly payments - I further relay to my friends that they should keep up with their payments each month. This way, they will be able to avoid a bad history of credit.

2. My credit balance - this is taken into account along with the limit of my credit account. If there is a huge difference between my loan balance and my credit limit, the higher the percentage for this category.

3. The duration of my credit history - the longer I have been able to maintain a good record history of credit, the higher my credit score is.

4. The credit type that I own - these are the kinds of loans and debts that I have obtained previously.

5. The new credits that I acquired - these are comprised of the loans which I have applied for, even those which have not been approved. The details of these loans are taken into account to calculate my credit score.

Then I said to my friends that if they want to improve their credit score, they must fully comprehend these categories. When they learn more, they will also learn the ways to keep their credits afloat. Lastly, I advised them that they should always check out the statement of their credit. Through this, they will know if someone is using their account to obtain money. If ever they notice that a certain report is off, then they should talk this over right away with a credit bureau.

I remarked that my credit score has risen well above average because I make it a point that I pay promptly, and I check my account reports all the time. With my high rating, I have been able to acquire lesser interest rates during my recent loans.

If you want higher ratings for your credit score, you should do the same.