Who is keeping your credit information?
Many of us are very familiar with the three digit FICO (Fair Isaac Corporation) score. It is important in determining new credit as well as the interest rate charged to you. The higher the score, the lower the rate a lender will charge you for your car loan, insurance premium, revolving credit such as credit cards and your mortgage.
There are three major credit bureaus that keep tab on your credit: Equifax, Experian and TransUnion. The law allows you to obtain one free copy of your credit information per year. However, the free report may not provide you with a score and you may have to pay to get it. Many lenders use the FICO score to determine new credit lines as well as to increase credit limits.
All credit bureaus consider your payment history (35 percent), credit utilization (30 percent), length of credit history (15 percent), credit mix (10 percent) and new credit (10 percent) in order to come up with a FICO score. One proven strategy to obtain a higher score is to use only one half of your credit limit on each card. Additionally, pay the monthly minimum due amount on time, and limit the number of credit lines available to you.
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