Corrections or additions?
This article was prepared for the June 27, 2001 edition of U.S. 1
Newspaper. All rights reserved.
Your FICO Matters
The Consumer Credit Counseling Service of Central
Jersey,
with offices in Trenton, says a good FICO score can make the
difference
between getting a good rate on a loan and paying way above prime.
FICO is short for Fair, Issac & Co. and is also the name of a credit
scoring system the company created to measure creditworthiness. A
FICO score is often the first thing creditors review when a consumer
applies for a credit card, a car loan, or a home mortgage. FICO scores
are now available online at www.myfico.com for $12.95 from Fair, Issac
& Co. and the Equifax credit bureau. You get your three-digit FICO
score along with score improvement tips and your Equifax credit
report.
The Experian and Trans Union credit bureaus also have FICO credit
scoring systems.
Here are tips from the Consumer Credit Counseling Service
(609-585-8220)
on improving FICO scores.
Do what the FICO report says. Your FICO report may tellyou what you can do to improve the score. These tips are called”reasoncodes” and many reports include at least four, including amountpast due on accounts, too many accounts with balances, or too fewaccounts with recent payment history.Pay off your credit on time. When you pay on time, yourscore goes up. It goes down when you pay late. Not surprisingly, yourpay history accounts for 35 percent of your FICO score.Review your credit reports periodically. Credit bureausmake mistakes, and they provide information that goes into your FICOscore. It’s a good idea to check your credit report from time to time,and New Jersey residents can order a free credit report from eachof the three leading credit bureaus per year. The telephone numbersfor the leading credit bureaus are: Equifax (800-685-1111); Experian(888-397-3742); and TransUnion (800-888-4213).Close old accounts cautiously. Believe it or not, closingthat old college account could lower your score by shortening yourcredit history. Your FICO score takes into account how long you havehad credit.Stay put for a while. Stay in the same residence for fiveyears or more, and you could see your credit score increase.Maintain at least one credit card account. Pay with cashall the time and the FICO formula will not have anything to measure.You will need to open at least one account for six months to get ascore.Limit credit card applications. An inquiry can go intoyour credit report when you apply for a credit card. Too manyinquiriescan lower your score because creditors may be wary of people tryingto amass a lot of credit or who jump from card to card.Keep five credit cards or fewer. Research shows thatpeoplewho carry balances on a lot of credit cards are a greater credit riskthan the general population.The Consumer Credit Counseling Service says “when it cometo credit, what you don’t know can hurt you.” A needlessly lowscore can add hundreds, or even thousands, of dollars a year ininterestcharges to credit card, car, and home loan payments.Previous StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
