As we experience a credit squeeze like never before, it is mandatory that consumers understand what a good FICO credit score is and how it can be improved for a better personal credit rating.

What is Your Fico Score Chart Made Up Of?

Primarily your Fico credit score is dependent on the following factors:

• Length of Credit History – This usually contains data like the time since the account has been active and classifies them based on account type (e.g. consumer credit contract, hire purchase, residential mortgage etc). It also contains data regarding the last time there was activity on the account. This usually accounts for about 15% of your personal credit rating.
• Repayments history – This is the most important part of your FICO score chart as this accounts for 35% of a good credit rating. The data contained in this relates to repayment information classed according to account type. It also displays the presence of any adverse public records e.g. bankruptcies, court judgments, writs etc and also amounts due on accounts in arrears and the time since these amounts were due. This section of your FICO credit score also shows delinquent accounts which have been paid as agreed.
• New credit contracts entered into – This accounts for only 10% of your personal credit rating and contains information such as new credit enquiries classed on the basis of type of account. It also shows the time since the last credit enquiry was made and if good credit history has been reestablished since the last time the account encountered problems.
• Balances owed on each credit contract – As it would suggest this part of your fico score chart deals singularly with balances outstanding on credit contracts classed on the basis of account type. This also displays the proportion of balances owed to the total credit limit available with regard to revolving credit contracts (e.g. Lines of Credit). This accounts for about 30% of your score
• Types of credit- This displays the types of credit used by the consumer e.g. retail accounts, mortgages, credit cards etc. This accounts for another 10% of your Fico credit score.

Your FICO score chart takes into consideration all the factors mentioned above and FICO scores consider not only the negative factors but also the positives.  In addition it would help to know that while banks and finance institutions may consider a lot of outside factors while making decisions, your FICO score only considers the information available on your personal credit rating.

How To Improve Credit Ratings?

Good Fico credit scores are important and if you would like to restore your credit score it is important that you know how to improve credit rating.

• Your repayment history is extremely important and it is essential that you ensure that you keep on top of your repayments for a good credit rating. If you have missed any repayments in the recent past catch up with them.
• Remember that accounts which have been in collections, even after being paid still remain on your personal credit rating for a period of 7 years. Hence paying them off will not make them disappear immediately.
• If you feel like you are going to struggle with your finance obligations, then it may be time to see your bank or financial institution. Talk to them and seek independent financial advice about the best way to resolve your financial stress without letting it adversely affect a good credit rating.
• Having a brand new credit card is tempting but do not accept credit unless needed . This not only creates unwanted credit but also hampers your personal credit rating as it causes an additional enquiry and adds to your list of balances owed/ credit limit available.
• If you have not had a credit file for very long, just to show enquiries on your credit report, do not open up a lot of credit enquiries on your account at the same time. This reflects badly on your Fico credit score as this will show too many enquiries in too short a time.
• If you have had a bad personal credit ratings history, to restore credit scores only get the credit that you need and start paying them off in a timely manner. This will improve your FICO personal credit rating in the long run.
• Check your credit report as often you think fit to check whether you have a good credit rating. Ordering your own credit report does not affect your personal credit rating in any way.

Knowing how to improve credit ratings is not hard. By following these simple steps and managing your credit better you can vastly improve your Fico credit score and achieve a good personal credit rating.