Today’s consumers understand that having a good credit score really can make a difference in their financial life. At no other point in history has such attention been paid to a consumer’s credit score. Even for those rare people that don’t borrow money, their credit score is still consulted by insurance companies, utility companies and more. If you have a less than optimal credit score, you will want to take the time to repair your credit and thus increase your FICO score.
As mentioned previously, there are several uses for a credit score aside from receiving better interest rates on credit lines. Insurance companies are mandated to set a client’s rate based on a proven relationship between two variables. If a person has more speeding tickets then they are likely to have more accidents. Studies have shown that this statement is true. Although a correlation has been made between a lower credit score and higher insurance risk, there is no statistical proof. However, it is the norm for insurance companies to obtain a consumer’s credit score and use it as a basis for determining his rates.
Understanding the ways in which your credit report is used is important as it will help you make the decision to maintain good credit. If your credit score is lower than you’d like, all is not lost. A credit score is not static and changes monthly. The following factors make up your score: payment history – 35%, amounts owed – 30%, length of credit history – 15%, new credit – 10% and types of credit used – 10%.
Since the majority of credit bureau reports contain inaccurate information, raising your credit score quickly is not out of the question. Working with a knowledgeable credit repair representative will ensure that you are taking all of the necessary steps to gain the best credit score possible.
