Finance: What Is Meant By A FICO Score?

What Is Meant By A FICO Score?

Written by Tim Gorman

Your FICO score or credit score as it’s commonly called is a very important calculation that can control whether or not you are eligible to receive credit and if eligible repparttar

terms you can receive credit under. Failure to understand repparttar 144733

impact this score can have on you future purchasing power and lifestyle can be disastrous. This article will break down all repparttar 144734

information you need to know regarding your FICO score.

As I mentioned above repparttar 144735 FICO score is a numerical score that is based on your financial history as collected in your credit report. Creditors can use this number to evaluate whether or not you are able to pay a loan back on time. The higher repparttar 144736 score repparttar 144737 more likely you are to pay off a loan on time and repparttar 144738 less of a credit risk you pose.

The FICO or credit score ranges are broken down as follows:

720-850 - This represent repparttar 144739 best score range 700-719 – Able to obtain favorable financing terms 675-699- This is still a decent score range 620-674 – May have trouble obtaining favorable credit terms 560-619 – May have trouble obtaining credit 500-559 – Time to improve your score

Your credit score is broken down into 5 distinct categories each with their own importance based on a percentile. The 5 categories and repparttar 144740 percentage they represent I relation to your credit score are as follows:

Payment History – 35% Amounts Owed – 30% Length of Credit History – 15% New Credit – 10% Types of Credit Used – 10%

Your payment history contains information on credit cards, retail accounts, installment loans, finance company accounts and any mortgages you may have had. It also details any past due accounts and repparttar 144741 amount owed on hem. You will also find bankruptcy information as well as other adverse information in regards to your credit history. This is why it warrants a 35% piece of repparttar 144742 pie. Your amount owed is generally speaking repparttar 144743 amount owed on any accounts you currently have and number of accounts with balances. Note that it has a large impact (30%) on your credit score. The length of your credit history details when accounts were opened and repparttar 144744 last activity on those accounts. New credit shows repparttar 144745 number of recently opened accounts by repparttar 144746 type of account and number of account inquiries. Finally repparttar 144747 type of credit used is a snapshot of what types of financing you have held.

Setting Financial Goals - Part 2

Written by Tim Gorman

In my earlier article “Setting Financial Goals – Part 1” I identified repparttar

4 simple steps to setting up achievable financial goals. I mentioned that your financial goals should be broken down into smaller more manageable goals and then written down to help you visualize them. This article expands upon that information. Writing your goals down has an additional effect besides allowing you to properly focus in on their success. In some cases you will discover that some of your goals are unfortunately so broad focused that they are unobtainable. However, don’t despair, as you will also be able to identify repparttar 144732

smaller more tightly focused and thus achievable goals very quickly and easily. When writing down your goals don’t be afraid to dream about riches or retiring early in life just be realistic in your expectations.

Goals are more easily obtainable when they are broken down into separate steps or categories based on time frames. When you place a time frame on your goals you are programming your mind to subconsciously motivate itself to succeed in fulfilling your goals. There are 3 time frames that are generally recommended for goal setting. They are short-term goals (within 1 year), intermediate goals (3-5 years) and long term goals (5 years or longer). A short-term goal generally takes one year or less to achieve, based on repparttar 144733 date repparttar 144734 task is needed, repparttar 144735 total estimated cost, and repparttar 144736 required savings. An intermediate-term goal is repparttar 144737 type of goal that can't be accomplished overnight but doesn’t require many years to accomplish. Examples might include buying a car, getting an education or paying off your debts like credit cards. Normally an intermediate-goal is anywhere from 1-3 years. Finally a long-term goal is a goal that requires an extensive time commitment (5 years or longer) in order to get accomplished or fulfilled. Examples of long-term goals might include college education for a child, retirement plan or purchasing a home. Whatever repparttar 144738 case, these goals generally require longer commitments and often more money in repparttar 144739 end.

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