Your FICO score is comprised of three digits that will determine your financial future. Your FICO score will not only determine whether or not you qualify for a loan, but also what type of interest rate your will qualify for. Your Fair Isaac Corporation (FICO) score is determined by various factors including (but not limited) payment history and debt to credit limits, and is used by every financial institution.
So what constitutes having a "good" FICO score? FICO scores can range from 300-850. The higher your score, the more likely you are to receive a loan.
FICO Score Formula % of FICO score
Record of Paying bills on time 35% Balances on cards or other loans compared to limit 30% Length of Credit History 15% New Accounts/Recent applications for credit 10% Mix of credit cards and loans 10% As you can see, paying your bills on time is 35% of your FICO score. Be mindful of that because you have the ability of controlling your FICO score just by paying your bills on time. All you have to do is pay the minimum balance that is due every month. This won't do much for reducing your debt quickly, but it does display to the bureaus that you are responsible and can handle your debt load.
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