Credit reports and building a high credit score

It stands to reason that if you want to have an easy time of securing a loan when you need one that you must have a rock solid credit score, so how can you achieve one? The FICO, or credit score is a three digit figure, ranging from three hundred to 850, that shows, in a pinch, how qualified you are to be given a loan or a credit card. Obtaining a good credit score is not as difficult as you may think, but it does demand time and discipline. A lender can examine your credit score and determine quite a bit from that number and can make a decision as to whether or not you will obtain the loan you are seeking right then and there.

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In order to have a FICO score of more than 800, you will almost certainly need a financial history that includes the following:

It would be helpful to have an auto loan or a home loan that is current with no late payments.

Your outstanding credit card debt doesn't exceed thirty to thirty five percent of your overall debt limit. The credit bureaus get nervous when consumers start using all of their credit limits, as it often means they cannot pay their bills. If you have a ten thousand dollar cap on your credit cards, you should not owe more than $3000-3500 at once.

Somewhere between four and 6 credit cards. 4 to six is a favorable number of accounts that an individual could really use in the course of doing business. A small number of credit cards will almost certainly not demonstrate adequate credit information and too high a number will make you a likely risk to overspend.
 

An overall credit record of 30 years or more. The majority of Americans with top scores are older, as it just takes a while to demonstrate that you have top-level credit worthiness.

Not too many credit checks. As we have indicated before, a credit check, such as a loan or mortgage application, puts a small dent in your FICO score. A couple of credit checks per year will not have a terrible effect on your FICO score. Too many credit inquiries in a brief period of time can put a large dent in your Credit score.

No late payments during the last seven years. Paying promptly comprises nearly a third of your score as lenders, when all is said and done, want to be paid in a timely manner. Ideally, you want your report to indicate no delinquent payments at all - not 30 days, and certainly not the worst-case ninety days late.

If you can achieve all of the items listed above, you, too, can have a top credit score. With smart credit use over a period of several decades, you can possess a credit score that puts you right up there with the Bill Gates' and the Warren Buffetts of the world. If you consider it, it's not really all that difficult to have great credit; it's simply a matter of paying your bills on time, over time, and obtaining credit only when you need it and using it only when you need to use it.