Your credit report and building a top score

It stands to reason that if you want to have an effortless time of securing a loan when you need one that you must have a sound FICO score, so how can you achieve one? A lender or creditor can look at your credit score and determine a lot from that figure and can make a decision as to whether or not you will get the loan you seek right on the spot. Obtaining a good FICO score is not as tough as you may think, but it does require time and self-control. The FICO, or credit score is a three digit number, that can range from three hundred to 850, that signals, in a pinch, how qualified you are to be given a loan or a credit card.

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In order to have a score of greater than 800, you will probably need a financial history that has the following:

• An overall credit history of 30 years or longer. Most Americans with top FICO scores are middle aged, as it just takes time to establish that you have top-level credit qualities.
• Your existing credit card debt doesn't exceed 30-35% of your total debt cap. If you have a $10,000 limit on your credit cards, you should not owe more than $3000-3500 at once. The credit reporting agencies get panicky when people start using all of their limits, as it generally means they cannot pay their bills.

• Not too many financial inquiries. Too many credit inquiries in a short period of time can put a large dent in your FICO score. As we have mentioned before, an inquiry, such as a mortgage application, puts a small dent in your score. A few inquiries per year will not have a bad effect on your score.
• It would benefit you to have a car loan or a mortgage that's up to date with no late payments.
• You should have between four and six bank cards. Four to 6 is a favorable number of accounts that a person might really use in the course of day to day living. A small number of cards will probably not generate sufficient credit action and too many will make you a likely risk to borrow too much.
• Prompt payments during the last seven years. Paying your bills on time comprises nearly one third of your score as lenders, when all is said and done, want to be paid promptly. Ideally, you want your report to note no late payments of any sort - not thirty days, and certainly not the worst-case 90 days late.

If you give it some thought, it is not really all that difficult to have healthy finances; it's simply a measure of paying your bills on time, over time, and borrowing only when you need it and using it only when you need to use it. With smart financial managment over a period of many years, you can possess a score that is as good as anyone's. If you can accomplish all of the items listed above, you, too, can have a top FICO score.