FICO, as defined on a credit score chart represents your credit worthiness, as viewed by potential lenders.

Although no one knows the exact formula used to determine your credit score numbers.

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

In general, points are added for positive credit transaction activity and are deducted when you fail to live up to your credit responsibilities in timely manner.

FICO credit scores range from 300 to 850 and you are required to have a high credit score if you want to receive credit at the lowest interest rates. Lenders know that consumers who have higher credit scores are more likely to make payments as agreed.

While this line of thinking may be logical, the average consumer should not enter into the credit score "game" so lightly. There is risk to achieving a high credit score.

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 the credit industry. They fail to provide a full credit score explanation, and the inherent risk of having a high credit rating.

Creditors promote the need for higher credit scores 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 that is a false assumption. The fact is that to many lenders, you are just like the goose that lays the golden eggs.

Not surprisingly, the lending industry 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 they do it by offering low interest rates and increasing your credit limit.

You might believe 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 the primary goal is to make money.

If your FICO is high on the credit score chart, lenders know that you are less likely to falter on your scheduled payments. They want to limit their risk, preferring to lend money to those with higher scores in order to create stable profits. However, they are also more than willing to lend to consumers with much lower scores, who often times are in desperate situations and willing to pay whatever they must in order to borrow money. This is a recipe for disaster because the only way they are able to get a loan is by paying much higher upfront fees and long term interest rates.

What most people do not realize is that if they never borrowed a dime, their FICO score would be zero. If you are debt free and don't used credit, there is nothing to base a FICO score on. Therefore, your score will be viewed by lenders as being poor. If you begin to view the FICO score as an "I LOVE DEBT SCORE", you can quickly see that aspiring to have a high FICO on the credit score chart is part of an incorrect belief system. "No Debt" should be a good thing, right?

Instead of spending precious time and effort worrying about where you land on the alter of the almighty credit score chart, I recommend that you totally eliminate your dependence on credit. It may seem ridiculous at first, but when you let go of those old beliefs that the credit industry has been paying billions to instill in your brain, you can easily visualize the power and serenity of having a zero FICO score and the many wonderful benefits that come from living debt free.

Instead of always seeking out credit when finances get tight, you should try other options that are available.

For example, after completing your debt reduction plans, check out ways to create new income in your spare hours. Options for increasing your income are not limited to asking for a raise, getting a second job, or selling items on eBay.

The efforts require for becoming debt free are well worth it because ultimately you will experience personal and financial freedom at a level never before imagined. Not to mention the fact that you'll never again have to worry about a FICO score and the endless fluctuations on your credit score chart.

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

» 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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