Banks & creditors use credit score as a main determinant to evaluate and assess applicants prior to provide them any loans.
This evaluation would help them to limit the chances of potential risks of getting back the debts.
A better score indicates that you have more chances to avail credits as compare to lower score.
FICO is the extensively used credit score model.
FICO score is derived from consumer's credit files.
FICO score ranges between 300 and 850.
Mentioned below are some of the ways which are helpful to improve FICO score.
Paying bills on time is a very positive way to improve your FICO score.
If you have a clean history of paying bills on time then there are great chances to improve your financial history.
At the other end late payments would bring your score down.
Just a single late payment could make a noticeable decline in your credit score therefore you need to be careful and attentive when you pay your bills.
If you face any difficulties to pay your bill on time because of your busy routine then automate billing is an option in your hand.
Many people use credit cards blindly and forget the fact that they would have to return the debt with an additional interest.
Always try to use credit cards sensibly.
If you hold large number of credit cards then try to reduce the number according to your needs and limitations.
If you owe any outstanding debts then you should try to pay off debts as soon as possible in order to improve your credit worth.
Do not open new accounts which are not needed.
Many folks believe that opening and running new account smoothly would increase their FICO score which is, in fact, a wrong approach instead it might lower credit score.
Try to manage your credits according to your limitations and do not allow them to go beyond your control.