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FICO Score
Explanation:
A numeric score (between 300-850) that indicates whether your credit history is good or bad. The FICO Score is comprised of the following five weighted factors: 1) Payment History 2) Amounts Owed 3) Length of Credit History, 4) New Credit, 5) Types of Credit Used.
While there are numerous other credit scores in use in the United States, the FICO Score is undoubtedly the one favored by the most financial decision makers, such as lenders and credit card underwriters. In addition, most consumers are not aware of the fact that everyone has three different FICO Scores, one based on each of their three major credit reports (Experian, Equifax, and TransUnion).
Our Thoughts:
As you can probably tell from the FICO Score's components, one's score is basically a numerical manifestation of their experience using credit and their level of responsibility in doing so. The higher your score, the better you've managed credit in the past and the more likely you are to get approved for a good credit card, get a low interest rate on a low, be hired for jobs that require a security clearance or the handling of money, etc.
The best way to build a solid credit score quickly is to open a credit card account and manage it responsibly. Credit cards report information to your major credit reports every month and as long as this information reflects an open account that is in good standing, your score will rise. In other words, you don't even have to make purchases with a credit card in order to benefit, though you must make on-time payments if you do.