If you have ever wondered exactly what your FICO score means, or if you have wondered what you can do to improve your credit score, this infographic from myfico.com can help:
Some of the key factors to improve your FICO score include paying you bills on time, keeping your credit utilization low, keeping your revolving balances low, and only opening new credit accounts when necessary.
Paying your bills on time is a major factor in the algorithms that calculate your credit score, accounting for 35% of your total credit score. Only 5% of those with 650 credit scores pay all their bills on time while 96% of 800 credit scores pay all of their bills on time. Similarly, those with 800 credit scores only utilize 7% of their available credit limits.
While it may take time to implement these changes into your financial habits, shifting from Fair credit score to an Excellent credit score is possible for anyone. Of course, with a higher credit score, it is more likely that you will be approved for personal loans for good credit, and therefore be able to secure lower interest rates.