Tuesday, August 23, 2016

The Almighty FICO Score

The almighty FICO score is truly the key to your financial health.  There are some who believe that you don't need a FICO score at all and others who think you should piggy bank off the financial health of others when it comes to a FICO score but in reality it is (for most people, obviously not everyone) a very important part of your life.
A FICO score is really just a number that is given to show how creditworthy you are.  It is determined by a few different factors, such as how long you've had credit, what kind of credit you have AND probably the most important how you pay back your creditors.  If you are someone who has a few credit lines, low balances and have never been late with a payment then your FICO score will be much higher than someone who has many credit lines, high balances and is always late.  Obviously this is a generalization and there can be other factors that come into play, but this is the easiest way to explain it.
A FICO score ranges from 350 to 850.  It is a magical number that will determine what interest rate you pay on an auto loan, if you can qualify for a mortgage and also may determine if you can get that apartment you've been thinking about moving into.  It is an extremely important number to know if you are interested in any sort of loan or credit card.  In many ways, it can make or break you.

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