Your credit score or FICO is a number that lenders use to help “predict” whether you are going to make your payments on time. In other words, it determines your creditworthiness.
Your credit score is based on credit report information. Credit card companies, banks, insurance companies , some employers, some landlords, and mobile phone companies all may use your credit score to determine if you qualify for your service.
Recently we checked my husband’s credit score. We were surprised at what we found. After months and months of making sure that we get all payments in on time and working on reducing our debt, we found that his FICO had dropped, instead of going up. It was not what we had expected.
Using a credit situation simulator, we found out that if we go ahead and pay $1,000 toward paying down our debt, then his credit score will go up 19 points on Equifax. It will go up 31 points on Experian. It will go up 21 points on TransUnion.
I decided I’d run it on paying $2,000 toward our debt. On Equifax, his credit score will go up 42 points. It will go up 45 points on Equifax. It will go up 39 points on TransUnion.
Now, all we have to do is sell some equipment that we have in storage and start majorly reducing our debt. Even though these were not guaranteed results, we’ve decided that it would be much more beneficial for us to pay down our debt at this point than to put the money in a savings account.
Have you checked your FICO lately?
About The Frugal Housewife
