Last Updated On : 04/19/2018

Benefits of a Free FICO score from a free credit report

Formulated by Fair Isaac Corporation, FICO score is by far considered the best model devised to gauge the credibility of an individuals financial status. The characteristic of this score is that it helps the individual in planning future money matters. You you get this FICO score by first getting a free credit report.

The three major credit-reporting agencies namely the Equifax, Experian and Transunion provide a free credit report annually. A customer could also opt for a 3-in-1-credit report, which has information of all three agencies for a considerably low fee. Other than safe guarding the information from identity thefts, the reports help customers to better their bad credit state.

For analyzing the score each credit-reporting agency needs the personal information, credit history, late payments, location of residential, charge-offs, bankruptcies, collections, and employment history. After considerable amount of research on the past and present credit situation, a score is allotted to the credit report. With each of the three major credit-reporting agencies giving variations in the same score, the average score given ranges from 300 to 800. A score of 750 is considered the best.

Unsecured loans and credit card debts negatively affect the FICO score. Other than loans defaults, an extreme debt to income ratio could also result in a low FICO credit score. Current state of employment and source of income does not affect the score, but are weighed for credit applications. To make the FICO score more inviting to creditors, individuals are always advised to pay their bills on time. Moreover credit balances can be reduced and credit limit increased to positively affect the score.

Many companies offer a copy of your free credit report through their websites. The free credit report available through the websites help customers understand their credit report better and keep themselves updated with the same. Companies lower overall rates and in the process control credit losses since they are able to judge those having a good credit score. In addition, compared to past norms, credit history can now be accessed and improved from time to time. By keeping a clean credit history right from the start, business deals can be hassle free in the future.

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