A credit score is a number that allows lenders to judge the ability of people to repay their loans. Lenders also use the score to determine if the credit limit should be raised in an existing account or even to decide what interest rate should be charged on a new or existing loan.
Credit scores become increasingly important if you are looking to obtain a mortgage loan to buy a house in Los Angeles or any other part of the country. Therefore, it is very important to keep a check on it as you may need to pay higher interest because of a bad score which can result in increasing the overall home value.
To generate the credit score, analysts traditionally use the information contained in the credit reports, account history, or applications. There are a variety of factors that companies use to determine the quality of your credit, but most of them are based on the formula created by Fair, Isaac and Company, Inc. better known as "the FICO score."
The three most important and consulted credit agencies are - Equifax, Experian, and TransUnion. Each one has their own criteria when it comes to generating consumers' credit score. You can check the score awarded by each of these three agencies by contracting the service with them directly, but keep in mind that your score may vary slightly between agencies.
With a FICO score, the higher the number, the better the score. Scores generally vary from 300, which is poor, to 850, which is excellent. According to FICO, five main factors determine your credit score:
Knowing this, it is obvious that the best way to increase your credit scores is to pay your bills diligently and on time. This is vital because your payment history makes up the majority of your credit score: 35%.
Even if you do not change anything else about your credit and you pay your bills on time for the next six to 12 months, you should see an increase in your credit score. You can also improve your credit position quickly by:
Achieving an excellent credit rating and becoming proficient in your credit can take a little time, but probably not as much as what you think, and it is achievable. By putting the tips mentioned above into practice, you can increase your credit scores as quickly as possible, while protecting your finances.
If you are still facing troubles improving your credit score, you feel free to contact Casa Bella Properties and get the best advice on improving your credit rating.