In today’s dwindling economy, low FICO scores are unfortunately spreading like the plague. More and more people are suffering from bad credit, inhibiting their abilities to get loans and credit with affordable interest rates and, in some cases, get jobs. That’s why it’s more important than ever not to underestimate the importance of your FICO score.
What is a FICO score? FICO is an acronym for Fair Issac Corporation, which is the company responsible for distributing your scores. Fair Isaac uses information from each of the three major credit bureaus (Equifax, Experian, and TransUnion) to determine your three scores. Most likely each credit report will contain different information. That’s why you may have a Equifax score of 600, an Experian score of 610, and a TransUnion score of 640.
Even if you have one low FICO score, you can badly hurt your chances of getting awarded loans. That’s why it’s important that you request your annual free credit report from each credit bureau. Check for errors and inaccuracies. Are all your paid debts listed as “paid”? Are some of your loans listed twice?
Various types of credit report errors may contribute to your low credit score. For example, there may be a charge-off on your report that’s 8 years old. Due to the statute of limitations on debts, that charge-off (paid or not) should’ve been deleted from your report after 7 years. Recent debts are always more crucial to your FICO score than your older debts.
If you sign up for a professional credit repair company, you can help raise your FICO score. The credit repair service will remove all negative items from your credit reports, causing your FICO score to gradually improve over time. Before you know it, you’ll be on the fast track to financial freedom!