My wife and I jumped for joy today when our myFICO ScoreWatch alert told us that our FICO credit score hit the much sought after 770 mark! Actually a FICO credit score of 760 is good enough to get you the best home mortgage interest rates out there. We had been stuck on 745 for a long time before we received the good news. Note that you can see the MyFico alert revealing that our FICO credit score has exceeded the target score of 760 in the screen shot below.
We have never been late on any of our payments in the last 8 or 9 years. On time payments account for 35% of ones credit score calculation. However, even if you make your monthly payments punctually, if your overall amount of debt is high or close to your credit limit then your credit score will be lowered due to “heavy use of your available revolving credit”. Put a little more simply: even if you are on time with your payments, if you are close to maxing out your credit limits then your credit score will suffer AND if your credit score suffers then you SUFFER.
Your credit score influences your car payments, home mortgage payment(or even whether you get approved for a home mortgage), employment since potential employers can pull your credit score, and how much you pay for your insurance premiums. So your 3 digit credit score pretty much controls the quality of your life!
My wife and I either used our debit card or payed cash for everything for the last 2 months in order to decrease our credit card balances AND now we are line for 30 year fixed mortgage interest rates as low as 3.2%
My apologies if I sound too arrogant or cocky, but we made some good choices and now stand to benefit by saving around 200 dollars per month on our home payment as well as killer rates for our new SUV.