What is a Good FICO Score?
Many Americans ask “what is a good FICO score?” — especially when they want to get a loan or get a copy
of their credit report. FICO score calculations dictate that credit scores for U.S. consumers begin at 300
and range all the way up to 850; so a score of 850 would obviously be ideal. Most people don’t reach that level but you might
be surprised to learn that the median FICO score for U.S. consumers is estimated to be around 723, which means that half of all
scores are between 723 and 850 and the other half are below that.
Some people panic when they see their credit reports for the first time or after not having checked them for a while, because
FICO score calculations placed their scores lower than they expected. If that happens to you, you might wonder if there is a way
to instantly improve your FICO score. If your definition of instantly is within a few weeks, then the answer is
no. But if you define “instantly improve your FICO score” in terms of one or two months, the answer is yes, you can!
FICO score calculation methods dictate that 35% of any score is influenced by timely payments. That’s why it is important to
get up-to-date with all bill payments immediately and continually pay on time. If you’re late paying any of your creditors, your
account will be noted and this can lower your score. If you receive your credit report and find that there are payments recorded
as late that actually were not late; you must dispute your credit report with the creditor. Keep a paper trail and, once the issue
is resolved and corrected by the creditory, submit the documentation to the three major credit reporting agencies. Then watch your
report to make sure the corrections are reflected.
Another way to instantly improve your FICO score is to stop charging and pay down your account balances as much as and as soon
as you can. A full 30% of the FICO score calculations are based on how much available credit you have in comparison
to the amount of credit lenders have granted you. That means that the less debt you’re carrying, the higher your FICO score will be.
If at all possible, don’t charge more than 30% of the available credit limit on a particular account or more than 10% of your total
available credit. You’d be amazed how using just this strategy alone will help you instantly improve your FICO score.
Although the preceding methods are some of the most powerful ways to improve your FICO score, another longer term method is to keep
your credit accounts open, even when they’re paid off. This is because FICO score calculations place 15% of their emphasis on the length
of time you’ve had credit. Closing old accounts automatically reduces your credit history and lowers your score, so avoid doing that if
at all possible.