Paying down credit card debt crucial to maintaining FICO scores
A new report shows over the past two years, the amount of Americans with FICO scores at 600 or below has risen from 24.1 percent to 25.5 percent. With a score of 600, borrowers find a large amount of difficulty receiving approval for loans.
Since the 2008 recession, lenders have become stricter with their standards for applicants. A survey released by FICO last week found 46 percent of bank risk managers predict qualifications to grow even tighter, according to the San Fransisco Chronicle. In order to ride out the slow economy, analysts say consumers are going to need to make a valiant effort to improve their credit scores.
Paying off credit card debt on time should be a priority. This can improve a credit score and maintain it over time. Individuals should also be mindful that credit utilization, new credit and types of credit used factor into a FICO score as well.
Consumers can get a free credit report from each of the three credit bureaus annually. Mortgage lenders also provide borrowers with their updated credit scores for free when applying for a loan. This can help individuals stay on top of their payment histories over time.