Your FICO® Score

Equifax demystified credit scores by being the first credit reporting agency to provide consumers access to their FICO® credit score - the credit score used by the vast majority of lenders to determine a consumer's credit rating.

The FICO® score, developed by Fair, Isaac (the pioneer in credit scoring) is a number between 300 and 850 that lenders use to determine your credit rating. A FICO® score is a snapshot of your credit rating at a particular point in time. The higher your credit score the more likely you are to be approved for loans and receive favorable rates.

More than 70% of the 100 largest financial institutions use FICO® scores to make billions of credit decisions each year, including more than 75 percent of mortgage loan originations.

Improve your Credit Rating

If you have a less than excellent credit rating, you are not alone. Many Americans have damaged their credit rating by missing payments, carrying high balances and whether from inexperience, illness or unemployment, over extending themselves financially.

It will take time, but you can improve your credit rating.

The first thing to do is to make sure you understand what caused your credit rating to decline.

The five areas considered in the calculation of your credit score listed from most important to least important are:

· Payment history

· Amount owed

· Length of credit history

· New credit

· Types of credit in use.

Next, lock away your credit cards. Don't cancel them because if your credit rating is very low, you may have trouble getting new cards. But don't use them. Right now your goal is to pay down your debt, not to increase it.

Create a plan based on the analysis of your credit score to take actions that will improve your credit rating over time. Since payment history is the most important factor in your credit rating, the first order of business is to pay your bills on time. Pay at least the minimum balance on each bill within 30 days.

If you are unable to afford to pay all your bills on time, consider credit counseling services. One such agency is Consumer Credit Counseling Service with more than 1,200 offices across the country. Call toll-free at 800/388-2227. Or write to the Federal Trade Commission, 6th and Pennsylvania Avenues, NW, Washington, DC 20004 for advice on paying off debt.

Stay away from so-called credit-repair clinics. Avoid companies that say they will guarantee to remove late payments or bankruptcies from your report or that pressure you to buy their services immediately. Only you can fix your credit rating.

The final step is to keep at it. The longer you exhibit good credit behavior by paying your bills on time and managing your credit wisely, the more your credit rating will improve, until you once again achieve a favorable credit rating