Your FICO score not only insurances your ability to get a credit card, but the ability to obtain a mortgage, low interest rates, vehicle loans and even auto insurance. A FICO score determines how likely a consumer is to pay their bills, into one a single number combining borrowing history, capacity to repay the debt and the probability that the debt will be paid.

FICO scores range from 0-850, which range is your FICO score in? Many consumers are unaware that FICO scores not only affect the ability to get credit cards, but they can directly influence the interest rate that the credit card comes with. Lower credit scores can cost the consumer up to ten percent interest rates on traditional credit cards.
 
• 750-850 Excellent Credit
• 660-749 Good Credit
• 620-659 Fair Credit
• 350-619 Poor Credit
• 0-0 No Credit

So, how exactly is your credit card formulated? 35% of the FICO score is based on payment history and any late payments that have been accrued and reported to the credit bureau. 30% of the FICO score is based on the use of your current credit cards and credit. The aspects that are examined are the amounts of credit owing, compared with the amounts of credit available. 15% of your credit history is based upon the length of time that you have been using credit. 10% of your credit is based upon any credit applications that are currently being processed, or anything that has been processed in the recent past. The last 10% of the FICO score is determined by diversity in the types of loans and credit that have been managed in the past.

How can you increase your FICO score? Consumers ask this question often, especially after seeing a rejection notice in the mail for a credit card that they have applied for. It is important to remember that using these tips is not immediate but over time these proven techniques than can increase your FICO score.

• Ensure that bills are paid on time
• Reduce Your Credit Card Balances
• Do not Apply for multiple credit accounts at one time
• Open credit accounts and use these accounts responsibly

Now that you know how to obtain good credit, here are some actions that could negatively affect your credit, making it harder to be approved for a credit card:

• Failing to pay bills on time, making frequent late payments to accounts
• Defaulting payments to creditors
• Inadequate credit history
• Length of time at current residence
• The debt to income ratio (the balance available compared to the credit limit on credit cards)
• Negative information such as bankruptcies and “written off” credit

The lower your credit score the riskier the offer becomes when a credit card is going to create a contractual agreement by offering you a credit card.

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