My FICO Score
What is a FICO Score?
A FICO (Fair Isaac Corporation) score can range from 300 to 850; the higher the score, the more worthy you are of credit. That means that the higher your score, the more likely you are to repay debt on time, keep smaller amounts of debt that you can easily handle, and have an established history of doing so. The average FICO Score is around 670 and the best deals are open to those with a FICO score above 720. The bets deals include pre-approved offers for loans and credit cards and credit at a lower interest rate than average. Since these individuals have a history of repaying debt on time, lenders are willing to offer them money at a lower interest rate because of the reduced rate of risk in doing so.
My FICO score has changed quite a bit over the past year. I moved into a new apartment (which of course needed furniture and decoration form one of America's top decorators) and that caused my credit score to dip down to the 710 range. After that, I continued to aggressively repay debt until I bought an engagement ring in November. At that point in time, my score dipped to 694 and rebounded when I sold some assets to repay that debt. From a purely financial standpoint, I didn't necessarily make the correct decisions...but what is the point in having a great credit score if you can't use it to your advantage once in a while? There isn't one. The reason you try to maintain a high credit score is so that it is there to provide you with great deals when those big (and great) opportunites come around.
Next posting, I will go in indepth on how a FICO score is calculated.
Also, small update on using credit to your advantage. I recieved a bonus of 3.96% of one months income from USAA as my cash back bonus. That amount doesn't account for much because I held a balance on the card...but if I had paid the balance in full each month...it is a nice little bonus once a year...
Until next time,
Thor
Helpful Links:
http://en.wikipedia.org/wiki/FICO
A FICO (Fair Isaac Corporation) score can range from 300 to 850; the higher the score, the more worthy you are of credit. That means that the higher your score, the more likely you are to repay debt on time, keep smaller amounts of debt that you can easily handle, and have an established history of doing so. The average FICO Score is around 670 and the best deals are open to those with a FICO score above 720. The bets deals include pre-approved offers for loans and credit cards and credit at a lower interest rate than average. Since these individuals have a history of repaying debt on time, lenders are willing to offer them money at a lower interest rate because of the reduced rate of risk in doing so.
My FICO score has changed quite a bit over the past year. I moved into a new apartment (which of course needed furniture and decoration form one of America's top decorators) and that caused my credit score to dip down to the 710 range. After that, I continued to aggressively repay debt until I bought an engagement ring in November. At that point in time, my score dipped to 694 and rebounded when I sold some assets to repay that debt. From a purely financial standpoint, I didn't necessarily make the correct decisions...but what is the point in having a great credit score if you can't use it to your advantage once in a while? There isn't one. The reason you try to maintain a high credit score is so that it is there to provide you with great deals when those big (and great) opportunites come around.
Next posting, I will go in indepth on how a FICO score is calculated.
Also, small update on using credit to your advantage. I recieved a bonus of 3.96% of one months income from USAA as my cash back bonus. That amount doesn't account for much because I held a balance on the card...but if I had paid the balance in full each month...it is a nice little bonus once a year...
Until next time,
Thor
Helpful Links:
http://en.wikipedia.org/wiki/FICO
posted by Thor @ 10:34 AM
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