myFico is a monthly, $40 subscription app. It tracks your FICO score and shows you how to improve it. FICO scores are made up of three separate scores that work together under different scoring models to make you eligible for large loans. FICO models 2, 4, and 5 are used when trying to gauge your eligibility to buy a home.
As I mentioned before, new credit accounts for 10% of your FICO score, 15% accounts for your credit history, 30% is based on the amount of debt you owe, payment history stands in for another 35%, and lastly, your current credit mix makes up 10%.
People tend to look at their credit score as an imaginary number you achieve once you successfully pay off a mountain of debt. People also believe that they should try to pay off all of their credit cards as soon as possible. Both of these things are untrue.
Paying your debts is important. That said, there’s a fine line between making smart payments, and trying to pay off debts in large erratic sums. Lenders want to see consistency, so it’s always best to be able to factor debt into your daily living expenses that you know you can handle.
After all, that’s the point of credit scoring: to determine whether or not you can afford to take on a loan and pay it back.
In my last article, I talked about how Susan was able to improve her score by getting a credit extension. Getting a credit extension can be done without the MyFICO app. But, staying in the loop about delinquent or closed accounts is difficult without myFICO.
In fact, as Susan was checking how to improve her credit score on the myFICO app, she noticed that she had a negative closed account. It was dragging down her Transunion score. She realized that it had been a past misunderstanding from a gym that had accidentally sent her to a collection agency five years ago. Even though the owner of the gym had realized his mistake, apologized, and paid for the account himself, the misunderstanding was never explained to Transunion, and so it kept bringing her score down.
All she had to do was call Transunion and dispute the account, and it was closed. Just like that, her score jumped by thirty points the next month. That’s why it’s important to have the MyFICO app. Credit bureaus won’t ever call you to help you keep your score up. You’ll have to do that on your own. If you don’t want to do that, you can always partner up with Score Shield Financial Group. They’ll make sure to teach you credit repair tricks and will dispute credit issues on your behalf.
A good FICO score can save you thousands of dollars over the course of a loan. It qualifies you for a low interest rate, and can also make it easier to make a smaller down payment. This can then be complemented with a low mortgage insurance premium. This makes it easier for people to own a home. Based off of your good credit, you’ll have to pay less money up front.
If you can make a twenty percent down payment and would rather not worry about mortgage insurance, that works too! The point is, if your FICO score is above 700, you’re going to have access to low rates and financing options that other people don’t have.
Rather than shoot yourself in the FICO score, download the app and track your score.
You can download the myFICO app from the Google Play Store.