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FICO Score

FICO scores are calculated to range between 300 and 850. The average FICO score in the United States is 692. Anything below 620 is considered subprime, which means that if you get a loan, you will probably pay a higher than those with a score of 700 and above.

Building a good credit history is fairly easy to do, but keeping it clean is an altogether different matter. There are many ways to damage your credit score, some obvious, and others not so easy to recognize, and once it's damaged, you have to work hard to get it clean again.

The most obvious way to hurt your FICO score is by making late payments on your bills, even if it is only one. Late payments on personal loans, credit cards, mortgage payments, car loans and other bills can sometimes be explained away when applying for more credit, as long as there are only one or two. But when you have late payments on all of your obligations, you are going to have a harder time getting more credit.

When there are foreclosures, repossessions, charge offs, and other big dings on your credit report, it becomes almost unrealistic to think that banks, credit card companies, department stores, and other creditors are going to give you any type of credit until those items fall off your credit report, which is going to take 10 years or longer.

Sometimes, inconspicuous, credit events will hurt your FICO score, such as a trip to the doctor or dentist in which a small co pay billing wasn't discussed with you, a change in insurance company plans in which a last payment was not sent in, a change in a cell phone plan contract that contained a charge for a specific service that was discontinued or add without your knowledge or that you had forgotten about.

High loan balances, maxed out credit cards, and judgments, are also bad for your FICO score.

School loan debt has become a national outrage over the last 10 years as the cost of a college education has skyrocketed and left many college students, graduates and non-graduates, with large amounts of unpaid loans and other college related debt. Unpaid school loans hurt FICO scores and cause many students to be saddled with bad credit for many years after leaving school.

Even if you pay your bills on time, creditors will sometimes put late payments against your credit simply because they did not update their files.

Co-signing with a friend, relative, co-worker, or other individuals is the worst thing you can do with your credit. Once you co-sign, you are liable for the payments, no matter what the friend or relative, or the person granting the loan says. If the monthly payment is late, missed altogether, or if there is a foreclosure, repossession, or judgment, it will go on your credit as a derogatory account.

Marriage can also be detrimental to your credit score. Once you are married, your credit and your spouses credit are combined, even if you or your spouse obtain credit separately. Creditors can, and will, find a way to link you together.

Consolidating accounts may not be the best way to go, either. A lot of small balances look better on your FICO score than one account with a big balance.

Your credit score is very important to you. It is always a good idea to know where you stand as far as your credit is concerned. If you haven't seen your credit report lately, you should take a few minutes and contact one of the three major credit reporting agencies to get your credit report. You are allowed to get a free credit report from either company at least once each year.

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