3 ways to pay off debt & how doing so could impact your FICO Scores

debt payoff plan

There’s an endless supply of theories on how to manage your debt in a healthy, responsible way. Some believe not to get into debt at all while others rack up credit card after credit card with little consideration. Neither extreme will likely have a positive impact on your FICO® Scores, but luckily most people fall somewhere in the middle.   At FICO, we recommend using available credit and loans when appropriate, making regular on-time payments, paying off debt when it’s best for you and keeping your revolving debt utilization low. With that said, there are a lot of people out there that simply feel buried in debt and want to pay it off completely. That’s a fine approach, but keep in mind that it might not have the impact on your FICO Scores that you were … [Read more...]

5 Things you should really consider when paying off debt

managing debt

It happens to the best of us and for so many different reasons: shopping addiction, unemployed, entrepreneur, medical issues, career advancement and college expenses. Whatever your reason, you’re in debt and it’s stressful.   Paying off your debt doesn’t have to be a traumatic experience. With a little planning and organization, you can develop and stick to a reasonable, executable debt-management strategy. But before you start planning and making payments, make sure you understand these five key points.   1. Paying off your revolving debt in full may not be better for your FICO® Scores While it’s true that, generally speaking, people who carry higher debt amounts are riskier compared to those that do not, research shows there is an exception.  People who have a … [Read more...]

Word on the web: Don’t let the warm weather put your finances off track

With the energy and joy only warm weather and sunshine can inspire, we’re entering summer with a pension for vacations, beaches, barbeques and fun. See ya later winter. But before you start charging plane tickets and breaking your budget for a brand new grill, let’s take a few minutes to refocus on financial and credit fitness. Here are 4 articles  to help you get focused.   Consumer tips for dealing with debt The first step in managing your debt is acknowledging that you have a problem. The Dollar Stretcher walks you through 9 ways to identify the debt problem and 9 ways to fix it.   How to apply for student loans while minding your credit Applying for student loans certainly won’t ruin your FICO Scores, but it’s important to think about how student debt could have a … [Read more...]

5 Smart credit card moves that could help your scores

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We all know the consequences of using credit cards irresponsibly: crushing debt, late and missed payment fees, poor FICO® Scores, bad breath (okay, maybe not one of those).   Of course, using credit cards wisely comes with a number of benefits. In addition to being a secure and convenient way to make payments, credit cards can help you establish and build credit, give you access to valuable rewards, and can even help improve your scores. To help you play the credit card game wisely, here are 5 smart moves to make.   1. Ask for a credit limit increase   Your issuer might occasionally surprise you with an unprompted credit limit increase, but it never hurts to take matters into your own hands if you've been pining for a higher credit line. A limit increase … [Read more...]

How to Avoid Paying Credit Card Interest

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It’s no mystery that credit card companies charge interest on outstanding balances. And most credit card users are at least nominally familiar with their credit card’s APR (annual percentage rate). You carry a balance, you get charged interest—simple enough.   Beyond that, things start getting a little murky. How is your APR determined? How do interest charges get calculated? And at what point does your balance start accruing interest charges anyway?   Confusion spells costs when it comes to credit card use. It’s hard to avoid paying interest if you have no clue how and why it’s being charged in the first place.   So if you really want to minimize the cost of credit, you’ll have to understand how exactly credit card interest makes its way onto your monthly … [Read more...]

You’re ready for a relationship. But is your credit?

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If one of your New Year’s resolutions included finding that special someone to settle down with, you need to be ready and able for that special relationship. This includes your credit.   Talking about money issues with a romantic partner can be awkward, but once the relationship gets serious, it’s important to be able to be open and transparent with one another. Having money discussions is a great way to practice this important relationship skill.   Issues related to money are one of the top reasons for divorce, so sorting out all the money stuff before a lifetime commitment or marriage can give your relationship a much greater chance of surviving and thriving.   Now, I’m not a therapist or even a relationship specialist, but I have had relationships myself … [Read more...]

5 Big credit mistakes you should avoid at all costs

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When it comes to credit, some people prefer the ignorant bliss method: Don’t look at your credit, don’t worry about your credit, don’t even think about your credit. This method can actually be quite effective for several months or even years – that is until you’re thinking about buying a new home, leasing a new car, financing a new computer, or whatever else you've been dreaming up.   When you’re actually looking for credit, it will quickly become clear that the ignorant bliss method was a mistake. Those financial decisions you carelessly made might actually hurt your FICO® Scores or credit history.   You don’t have to be the type of person that worries about credit constantly (although a periodic review of your FICO® Scores and credit reports is always a good idea). … [Read more...]

3 Easy credit-building steps for recent college grads

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Establishing credit when you’re just starting out can be a bit of a catch-22: to establish credit, you need to get credit; to get credit in the first place, you need to have an established credit history. It’s an infinite loop of frustration (one you should get familiar with if you’re a recent grad—to get a job, you need work experience, which you can only get if already have a job . . .).   Luckily, breaking free of this paradox isn’t as hard as it initially sounds if you know where to start and know what to do once you get going. Establishing a credit history right out of college is one of the most important first steps you can take toward your financial future—it can help you get approved for car loans and mortgages and qualify you for better interest rates that will save you … [Read more...]

Understanding how lenders
use credit scores

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You already know that most of the top lenders (90% of them) use FICO® Scores (the top name in credit scores) when making lending decisions (probably because we’re always telling you about it). But what does that actually mean? What really goes down when you apply for a loan? Whether it’s an automated approval process or a 60-day mortgage close, a lender is doing a lot to figure out if you’re going to pay them back on time or not. Here are a few things that might help you understand the approval process.   FICO Scores are designed to help evaluate your risk FICO® Scores aren’t just an arbitrary number provided on a whim. They are based on complex, mathematical algorithms that statistically evaluate a consumer’s credit risk with a point system. Points are assigned for … [Read more...]

Introducing industry-first technology from myFICO

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We have a huge announcement to make. Actually, make that four huge announcements. When we introduce new technology and features, we really like to make a splash.   We’ve listened to your requests, complaints, suggestions and praise and developed three new products that we think you’re going to love. In fact, we’re leveraging technology that’s never before been available to consumers. So without further ado, allow me to introduce three new products and more from myFICO.   FICO® 3-Bureau Credit Monitoring For the first time ever and exclusively at myFICO, you can now monitor three FICO® Score — one from each credit bureau — and monitor all three of your credit reports. This intelligent new product will help you get a better understanding of your full credit picture. … [Read more...]

Disclaimer: This content is not provided or commissioned by a credit card issuer. Opinions expressed here are the author's alone, not those of a credit card issuer, and have not been reviewed, approved or otherwise endorsed by a credit card issuer. This site may be compensated by credit card issuers mentioned on the site by such companies.