The best credit report is the one with the best credit rating in it. A credit rating is a number that is used by lending institutions in deciding whether to accommodate a loan for an individual. The most well known and most used credit rating in the United States of America is the FICO score. The FICO score is the rating that was conceptualized by Bill Fair and Earl Isaac of the Fair Isaac Company (FICO), which was established in 1956.

The best credit report can be obtained free from the three credit rating bureaus, which are the Experian, Equifax, and TransUnion. They are mandated by the Fair and Accurate Credit Transactions Act of 2003 to release to every US resident his/her credit rating once a year free. Experian is a publicly listed credit information company in the London Stock Exchange and has global presence in 36 countries. Equifax, on the other hand, is also a publicly listed credit-reporting agency in the New York Stock Exchange and was established in 1899. TransUnion is a credit reporting bureau in the United States of America and was founded in 1968.

TransUnion, Equifax, and Experian do not share the same data thus it is very possible that each report differs in its credit rating. Historically, a FICO score of 620 serves as the divider between \”prime\” and \”sub prime\” credit rating. An individual with a credit score of lower than 620 will normally have a difficult time acquiring loans. For an individual to have the best credit report, he/should aspire to have a credit score of more than 700. The FICO rating, by the way, ranges from 300 to 850 with 850 being the perfect score.

To have the best credit report, a person must make sure that he/she is not late in his/her credit payments. In the FICO score, payment history accounts for 35% of the individual\’s FICO rating. Late payments will drastically reduce the FICO score thus a person must pay his/her bills on time. For the best credit report, a person must also try pay off the balance of his/her credit cards to lower the credit utilization ratio. The ratio of revolving balance to the credit limit is 30% of the FICO score. A lower ratio means a higher FICO score and vice versa.

In aspiring to have the best credit report, the individual must also maintain credit cards longer. A long credit history is 15% of the FICO score. Using different types of credit will also help in increasing the FICO score that will eventually realize the person\’s goal of having the best credit report. The different kinds of credit are installment, revolving, consumer finance, and mortgage which account to 10% of the FICO score.

The last 10% of the FICO score is for the recent credit searches. For a person to have the best credit report, he/she should limit credit applications as this can lower his/her FICO score because the financial companies will make inquiries to the three credit rating bureaus.

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Category: Finances
Keywords: fico score,best credit report,credit report