The average FICO score that you need to get the best credit is around 720. A good fico score is an essential part of our lives. Do you want to have the best possible fico and credit scores?
More than likely you have heard about fico scores and wondered what it is. You'll find that fico and credit scores are used to decide your credit worthiness when lenders are deciding to lend to you and what interest rates to charge.
Having a good fico score is important, and the higher the score, the better you are doing. Of course, many people do not understand how this score works, which leaves them behind the game when it comes to working on better credit.
Here is a look at the fico credit score scale and other important information that will help you understand more about this score.
What is Average?
First, you probably are wondering what the average fico score is these days. While average used to be a bit higher, today the average is somewhere between 650 and 700.
The average has fallen a bit in the past couple years with the economic crisis that has affected the United States and many other countries. Of course, you probably don't want just an average fico score.
More than likely you want a good fico score, which is above 720. With a better score, you'll be able to get loans and credit and the interest rates will be lower as well, saving you a whole lot of money.
What Determines the Score?
Of course, it is important that you understand what determines fico and credit scores as well. There is a fico credit score scale and a variety of things that are taken into account when determining your score.
Five specific things are used to determine what your score will be. These five items include your credit balances, your payment history, the amount of new credit you have, the length of your history, and the types of credit that you have. Out of these five things, the one that is the most important is your payment history.
Tips for Achieving a Good Fico Score
More than likely you want to ensure you have better than the average credit score, especially if you want low interest rates on loans or credit cards. Wondering how you can achieve a good fico score? Here are a few important tips that can help you climb the fico credit score scale.
Tip #1 - Try Not to Apply and Open New Credit Accounts Often - If you want a credit score that is better than average, you don't want to apply or open new credit accounts too often. This will actually make your score lower in many cases.
Tip #2 - Always Pay on Time - One of the most important things you can do to have a better than average fico score is to always pay on time. Since this is responsible for the biggest part of your score, it is the one you need to focus on the most. Even if you are only a bit late, those late payments can have an impact and lower your fico and credit scores.
Tip #3 - Get Current as Soon as You Can - Sometimes you do fall behind and you can't help it. If this occurs, get current as soon as you can. Then stay on top of those payments. This can help you achieve that good fico score that you want.
Tip #4 - Try to Keep Balances as Low as Possible - The higher your balances, the lower your score is going to be. You can make sure you get a better than average score by keeping your balances as low as possible. Don't close those accounts when you pay off balances either. Keep them open and they'll help give you a better score.
These are just a few tips that can help you make sure you have a good score instead of just an average fica score. Make sure you totally understand your score, what a good score is, how the score is determined, and ways that you can improve your score.
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