The FICO score given on your credit score chart basically represents your credit worthiness, which lenders make use of for determining your credit limit and most importantly, the rate of interest applicable on the loan amount.

FICO scores are determined on the basis of various factors (percentage wise) such as your payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and types of credit used (10%).

Points are added for every positive credit transaction and are deducted when you fail to meet your credit liabilities in time.

Credit scores range from 300 to 850 and you are required to have a high credit score if you want to get credit at low interest rates. This is because lenders use the logic that anyone who has a high credit score is most likely to pay his installments on time, as compared to a person who has a low credit score.

While this line of thinking may be logical, it does however require scrutiny, especially from the consumer’s point of view.

Lenders and debt management firms may repeatedly talk about the importance and benefits of maintaining a high credit score. However, if you think rationally, you will realize that having a good FICO on the credit score chart is just a concept promoted by creditors.

Creditors use this argument to increase business generation and in turn, earn huge profits. You might think that having a high FICO score automatically transforms you into a high net-worth individual, but you will be surprised to know that for lenders, you are just like the goose that lays the golden eggs.

The lending industry is a huge industry that covets profits over everything else. The industry spends millions in marketing and advertising in an effort to entice consumers to take on more and more debt.

Lenders know exactly how to motivate people like you to sign on the dotted line and that is by offering low interest rates and increasing your credit limit.

You might think that you are being offered special treatment, but the fact is that you are just being used as a tool for promoting the business interests of your lender. No, the lender is not evil, but understand he is in business for himself, and to make money.

If your FICO is high on the credit score chart, lenders know that you are not likely to falter on your installments and as such they want to lend money to you in order to create profits for themselves.

Aspiring to have a high FICO on your credit score chart is thus just a part of a wrong belief system and as such should be avoided at all costs.

Instead of spending precious time and effort in maintaining a high FICO score, it is recommended that you totally eliminate your dependence on credit. It may seem ridiculous at first, but when you let go of your old beliefs, you can easily visualize the possibility of having a zero FICO score and the many wonderful benefits that come from living debt free.

It is not that you will never require extra funds in your life. It is just that instead of applying for credit, you should try other options that are available.

For example, you can try increasing your current income so as to meet any additional needs you might be having. You can negotiate for a raise, get a different job, invest in real estate, start a home business, sell items at auction, etc.

You may have to overcome some initial problems, but it will be worth it because ultimately you will be able to live a debt-free life and as such will never have to worry about FICO score fluctuations on your credit score chart.

You can thus become more self-reliant and lead a more happy and fulfilling life.

» Credit Score Information - Unconventional Use of FICO
Why protecting your credit score information is so important today. You may be very surprised, and also quite concerned, to learn how your score is used by others.

» Credit Score Ranking - How Do You Rank?
Credit score ranking is important in the financial industry. Consumers are well advised to understand how the process works in order to ensure they are not negatively impacted by the system.

» Credit Score Rating - How Does FICO Rate With You?
Credit score rating is calculated by the big three credit agencies. The vast majority of lenders contract with one of the three agencies to provide credit reports on all applicants.

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