A FICO score is basically a number between 450 and 850 and everybody has one. So, why should you care and how does it addict your lifestyle?
A FICO score is an indicator that tells others just how likely it is that you are going to pay back any debt that you may have. It looks at things such as how well you have paid your bills in the past, how much debt you currently have and how easily you can pay that debt.
Before lending to people banks will take into consideration the FICO score to just get a feel for who you are and how likely it is that you will actually repay your debt. If your FICO score is below 600 it indicates that you are very likely not to pay your bills on time, if at all. If your score is above 700 however it indicates that you can be trusted to make the payments.
How does this affect your life and why would you want to keep this score as high as possible? Well the biggest reason is that it is what everyone looks at.
For starters if you ever want to buy a house and don’t have the $100,000s of dollars lying around to do it you are going to have to take out a loan. If your FICO score sucks you will probably not be able to get one, or if you do the interest rate would be so high that you would struggle to pay it.
The FICO score doesn’t just affect getting a loan. It also makes it harder to do other things such as find a place to rent. If your FICO score is really bad nobody is going to want to rent a room to you.
A FICO score really does affect the quality of your life because anyone looking to enter into a business agreement with you will have access to your score and statistics. This means that the higher the score you have the better off you will be. It is just easier to keep it as high as possible.
For information on how to quickly fix bad credit visit Shaun’s article on how to build credit history