Best Credit Score Possible

K.E. Varner, a former manager at Equifax, believes that all things are negotiable with the right credit score.

It is important to have a good credit score since over seventy-five percent of mortgage lenders and eighty percent of financial institutions use these scores in determining evaluation and approval for credit applications. So what is the best credit score possible? A good credit score (or a FICO score) is above 700, and once you hit the 720 mark you have a significant advantage and would most likely get the very best rates. The best credit score possible is 720 and above with the highest being 850. However, most people would not be able to exceed 825.

A FICO score is computed by putting together the following factors: thirty percent -- payment history, thirty percent -- amount owned, fifteen percent -- length of credit history, ten percent -- new credit, and ten percent -- types of credit in use. The FICO score lists 300 as the worst and 850 as the highest possible score that anyone can reach or achieve. Your credit score is based on credit history, thus, it is rare to find anyone with the perfect score of 850. Truth to tell, having the best credit score possible is not going to make any dramatic changes in your life at all. There is no compelling reason to strive for a credit score of 850 since you will be getting the same rate as that of someone having a 775 score; in addition, with a 720 score lenders will classify you along with those with a score of 800 or 820.

While the best credit score possible is 720, a score below 700 would be a valid enough reason for you worry. One of the first things that you can do to fix a low credit score is to use credit sparingly since creditors often like to see consumers using their credit wisely. Second, try not to carry a wallet loaded with cards; having a collection would not impress your lender. People who have great credit scores do not often use credit. Third, try to pay on time, and make sure that the creditor notes that payment correctly on your credit history. It is important to remember that even one late payment can cause your credit score to dip. Next, try to view credit as a safety net, and that you should only use it for necessities or for life-emergencies. Finally, go over your credit report, so you can use it to improve your performance and correct mistakes.

Striving to maintain the best credit score possible pays well since you can expect many advantages. Aside from getting better deals, you can expect to get more job offers if you are able to maintain a good or the best credit score possible. Recently, many potential employers look over credit scores and reports of candidates because they think that it is a good measure of a person's character. There have been studies made underlining the connection between financial stress and poor productivity. You get lower interest rates when you have a good score, which would be true for car loans, home loans, and credit cards. Insurance companies usually go over credit scores to determine if coverage for either home or auto will be offered and at what premium. Insurers have come up with a correlation between good credit scores to fewer claims; this may be attributed to the fact that prudent credit use often results to responsible homeownership and driving.


Source: Credit Cards For People With Bad Credit Rating

 Print this page
  |     Bookmark this page