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?
Basically a FICO score is a score that is suppose to measure how likely you are to pay back your debt. It takes into consideration things like how well you have paid back your debt in the past and how much credit you have available and how much of that credit you actually use.
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 in the world does this affect you and what would be the purpose of keeping it high? The biggest reason to keep your FICO score as high as possible is that everyone looks at it.
If you would like to buy a house and don’t have a ton of money saved up you will have to take a loan from a bank or a mortgage company. Well if your credit score is not up to par then the chances of you getting your loan are pretty low. And if you are able to get a loan with a bad FICO score it will probably come with a high interest rate.
Also if you want to rent an apartment or a house your landlord will be looking for indications that you are responsible and that you will repay them. The best way to do this is through the FICO score.
In other words if your FICO score is terrible your quality of life will sink greatly. Pretty much anyone who wants to know how likely you are to pay your bills has access to that information through the FICO score, if your score is terrible then you will have less opportunities available to you and many more challenges. So it is best to just keep it as high as possible.
For information on how to raise FICO score quickly visit Shaun’s article on how to build credit history