Wednesday, August 13, 2008

Utterly Off Topic Wednesday - Your FICO Score

Well, it seems that there is a trend toward "Wordless Wednesdays" in the blogosphere in which the bloggers take a break from commentary or blather and publish only pictures.

In that same spirit, I offer "Utterly Off Topic Wednesday". We will not be talking about homeschooling at all today.


Let's start with the quote of the day - I just got this in an email and LOVED it.

Calling an illegal alien an 'undocumented immigrant'
Is like calling a drug dealer an 'unlicensed pharmacist.'

I wish I knew who said this, I would like to shake his hand, or at the very least give him an attribution for the quote.

OK, now for the meat. I want to bring to your attention an article on my free info site about debt consolidation and other debt related topics at There is actually also a link to it in the sidebar.

The article gives three strategies to raise your FICO score. For the uninitiated, the FICO score is a number the three major credit bureaus use to determine whether the way you handle money makes you a reasonable risk for them to extend credit. The score has several components - payment history, utilization (do you have a lot of accounts with low balances or a few accounts that are maxed out?), established history, number of inquiries, and mix of credit types that you are holding. Your FICO credit score can be used to determine your interest rate and how much credit a lender will give you.

Here is a sample strategy from the article. You can read the whole article here.

Strategy Two: Maintain Your Good Credit History

Good job - you have paid your bills on time, and do not have high credit card debt. Here's some ideas to keep your FICO score as high as possible.

First, don't close your old accounts. One part of your credit score is based on the amount of credit available versus amount of credit used. Closing old accounts can lower this part of your score. Another part of your score is based on the longevity of your accounts, another reason not to close older accounts even after they are paid off.

Second, paying off your credit cards every month is good money management, but you may be able to improve in this area. Here's the scenario: you have a $2000 credit card. Every month, you charge about $1800 to that card. And, every month you pay it off. But here's what happens - your credit card company reports your credit information monthly to FICO. If they report it before you pay off your card, it looks like you carry a high balance on your credit card every month. You may find your FICO score improves if you pay off your credit card at a different time of the month.

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