If you have visited this page, the chances are that you are serious about your credit score. Unfortunately, there are lots of myths surrounding FICO scores and some of those can really misguide any person without a thorough understanding of the subject. In this article, we have put together some of the foremost factors that you need to control in order to maintain your good credit or improve your credit that may not be perfect at present amongst all 3 credit scores. At Valley Auto Loans, we have been working with bad credit consumers for many years to help them get the better of their financial concerns.
Unfortunately, many credit card users are not aware of the fact that getting too close to their credit limit is not advisable, as far as their credit ratings are concerned. Even it is not sufficient to make timely monthly payments, if you have spent too much on your credit cards. Ideally, to have a FICO score above 720, one must stay within 25% to 35% of his/her maximum credit limit. The formula used by FICO puts maximum importance on the payment history of the person. Your credit score will get affected severely if you don’t have sufficient credit history. However, it is possible to improve the score by maintaining minimum debt and a good payment record.
Many people without adequate credit history often think that opening a new account may help their credit score. However, the truth is far from that, and this will only lower your credit score because FICO considers it as a negative credit behavior. So think twice before applying for new credit cards because the average account history is lowered when you apply for even one new card. Most of you are aware of the fact that all lending companies run a credit check when you apply for loans or credit cards. All such credit inquiries are reflected on the credit report, and too many of them can certainly have a negative impact on your FICO credit score.
Other common reasons behind low credit score are bankruptcies and late payments. Unfortunately, bankruptcies and late payments show up in credit reports for the next ten and seven years respectively. However, having debts can also boost your credit score in a big way, provided you can manage it efficiently. Having a limited number of loans and maintaining a good payment history would certainly help you in this regards.
Valley Auto Loans can provide you the much needed relief if you are looking for low interest auto loan service. Many borrowers without an impressive credit have got their hassle free car loans with low interest rates from us. Keep visiting this blog for more interesting topics related to the most common financial issues in this troubled economy.