FICO Credit Score

Great Grandmaster Tae Yun Kim teaches that we have the power to fulfill our dreams. This includes the power to increase our credit score so we can get loans at a lower interest rate. Here are some “tricks” I have learned to maximize my FICO credit score.

Your FICO credit score is basically a rating by banks of how easy it is to make a profit by lending you money. The higher your score, the more eager banks will be to loan you money, so you will get approved for higer loans, higer credit card limits, and lower interest rates. 850 is the highest possible score. 650 is the minimum score to get a decent car loan or credit card. 700 will get you the best interest rates on a car loan or credit card. These days, you need at least 740 to get the best rate on a home mortgage loan.

#1 for your FICO score is always pay your bills on time, even if it’s just the minimum payment. Even when I lived on credit cards while unemployed, I still payed the minimum payment, which made the banks feel good about the balance going up every month until I was employed again. If you haven’t been careful about paying on time, starting now will boost your credit score within 6 months. Even if you file bankruptcy (which stays on your credit report for 10 years), if you always pay your bills on time after that, you will have a 650 FICO score after only 2 years.

#2 for your FICO score is keep your credit card balances below 50% of the available credit. Below 25% is best. This is true for each individual credit card and for total of all cards. Any 1 card being maxed out will hurt score even if total used credit is below 25%. Your FICO score won’t get above 680 if you have high credit card balances, even if you have zero late payments on your entire credit history. Banks think you having high credit card balances means you tend to overextend yourself, instead of exercising restraint.