FICO Tips & Credit

The Fair Isaac Corporation's credit scoring formula uses consumers' credit information to award each individual a FICO score. Although not the only type of credit score available, FICO scores are the most widely used when determining an individual's creditworthiness. By maintaining a high FICO score, you can ensure that you remain eligible for lines of credit and loans you apply for.

Monitor Credit

Regularly monitoring your credit helps you catch and quickly resolve errors --- preventing lasting damage to your FICO score. Federal laws allows you to pull one free credit report each year. Because each credit bureau may have different information on file for you, however, it's important to monitor all three of your credit reports. You can purchase your credit reports from the credit bureaus themselves or from a third-party credit monitoring service.

Should you discover a mistake in your credit file, the Federal Trade Commission recommends notifying the credit bureaus of the error via telephone, online or by mail and asking for an investigation. You can also contest mistakes in your file with the company that originally reported the error.

Pay On Time

Paying your debts on time is one of the best ways to maintain a high FICO score. According to MSN Money, a single late payment to a credit card company can cost an individual with a FICO score of 780 up to 110 points, depending on his other credit information. Your payment history makes up 35 percent of your FICO score. Thus, it's imperative that you stay organized and always pay your creditors on time.

Pay Down Balances

If your FICO score needs a little boost, paying down your credit card and line of credit balances will increase your credit rating. The FICO formula calculates your score based on the supposed risk you present to creditors. By paying down your balances, you increase your available credit and, in doing so, demonstrate financial stability. The larger the gap between your spending limit and your balances, the better your FICO score.

Ask for Goodwill

Making mistakes is a trait of human nature. Unfortunately, these mistakes can lower your FICO score. If a late payment you made to a creditor or lender in the past is dragging down your scores, the late payment remains a part of your credit history for seven years --- unless you can have it removed early.

Some lenders will remove a single late payment on your credit record as a gesture of goodwill at your request. Goodwill requests are best made in writing. Your chances of obtaining removal are better if you have held the account for years or the late payment represents a single mistake nestled among a history of timely payments. Once the creditor removes the late payment from your credit report, your FICO score will increase.