I recently checked my full FICO score out, and noticed there were 2 delinquencies on my account. I’m very good about paying my bills on time, so I did some digging and found out where they came from.

What happened? Both delinquencies were from my student loan account with Firstmark Services. I have two loans with them which I pay together each month. Last year, before I was totally organized with my loans and finances, I somehow managed to have a 60 day past due balance on the account. My parents had been paying them for me during the months before. We obviously didn’t communicate very well when we made the transition to me paying on the account, and ended up with the late balance.

I realize that these delinquencies could have been avoided had I paid closer attention to my finances. It’s my mistake; one that would stay on my credit report for up to 7 years if I didn’t do something about it. Because I didn’t want that bad mark on my credit report, I decided to make a call to Firstmark.

I spoke with a very nice customer service rep named Erin, and kindly explained the entire situation to her. I also pointed out the fact that we have never had a late payment otherwise. Erin was very helpful, and they were able to retract the delinquencies for BOTH loans as a one time courtesy since my payment history has since been excellent.

So now, thanks to my 3 minute phone call and Erin’s kindness, I have gone from having 2 reported delinquencies to having zero. That was a week or two ago, and now my FICO score has gone up by 27 points! That’s enough to qualify me for much lower interest rates on auto loans or home loans.

The moral of my story is that you should always keep a close eye on your credit reports! If you see something that could be harming your credit, then you need to take action. Even in a case like mine, when the fault lies with you and not the credit company. In most cases, if you have a good payment history, they will help you out. And remember, it never hurts to try!

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If you know what your FICO score is, you’re already way ahead of the game. If not, don’t worry, because you’re definitely not alone.

What is a FICO score and why is it so important?

Your FICO score is that magical 3 digit number calculated by Fair Isaac that can have a big impact on your life. Aside from credit cards and loans, it has the power to determine whether or not you will be able to get your own cell phone contract, apartment rental, or even a job. (I wasn’t kidding when I said it was important). If you have a high score, you will likely be approved for more credit accounts with much lower interest rates!

So now that you know what your FICO score is used for, it’s important to know how it’s calculated. Your score can range from 300-850; higher is better. Take a look at this chart; these are the 5 things credit bureaus take into account when calculating your score.

As you can see from the chart, all of us recent college grads are already at a disadvantage. Most of us will have lower scores just because our credit history isn’t long enough. This is why it’s important to make up for that by keeping our amount owed low. The amount owed can also be called your debt to credit limit ratio. Essentially, this is just the percentage of available credit you have used up. So if you have two credit cards with an available limit totaling $10,000 and those cards are carrying a total balance of $5,000 your debt to credit limit ratio is 50%. Some of you may be thinking ‘50% isn’t so bad,” but let me tell you the lower the better. If you can’t pay off your credit cards every month, I would suggest keeping your debt to credit limit ratio below 30% at all times.

How to get your FICO score

It’s important to know your score before you apply for any type of loans, mostly the big important ones like auto or home loans. Getting them is fairly easy, but you will need the general information about your student loans and other debt accounts (usually amounts owed or the name of the lenders).

The best site for your score is the MyFICO website. The site offers quite a few different FICO report products, so you can choose which you want depending on your needs or budget. Unless you’re planning on applying for a home or auto loan, I would recommend going with the most basic report, which you can find here: FICO® Score & Credit Report.

This one gives you your FICO score from one of the three reporting bureaus. It will give you more than enough information and tips on improving your score, if you’re just starting to manage your money and just want to get an idea of where you stand. It’s the most affordable as well, costing only $15.95.

If you’re getting serious about buying a home or a new car, then you may want something a little more in depth. Suze Orman’s FICO® Kit Platinum gives you your FICO reports from all three reporting bureaus (yes, your scores may be different!) It also includes advice on how to make buying a home more affordable, and advice on getting out of debt.

The site offers other cool stuff like score monitoring, FICO forums, and a credit education page that is super helpful. If you want to check out the site, you can find it under my ‘Useful Sites’ tab as FICO Scores/Reports .

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