If your FICO score is FUBAR it may be time to consider cleaning up your credit.

The acronym FICO refers to the Fair Isaac Credit Organization and credit bureaus use this organization’s software to assign credit ratings to mortgage applicants. FICO scores are usually used specifically for real estate loans and scores can range from 300 to 850 with 300 being the absolute worst.

Many people with low FICO scores will have a hard time qualifying for mortgages and if they do qualify they are likely to have to pay incredibly high rates to compensate creditors for taking the risk of taking them on as a borrower. In fact, Fannie Mae and Freddie Mac usually don’t accept borrowers who have FICO scores less than 620.

Fouled up FICO scores may sound like the nails in a financial coffin, but there are ways to improve badly damaged credit so don’t give up hope.

Attempting to slowly rebuild credit is the best way to improve a low FICO score and there are many low-risk ways to do so.

Credit Clean-up Methods:

- Try to sustain a steady well-paying job for a few years

- Pay your bills off on time an in full

- Pay off all outstanding loans before applying for a new loan or mortgage

- Get in touch with an organization that offers free financial advice

- Organize a budget

- Try to get a credit card that you can responsibly maintain

Obviously having a steady job will vastly improve your financial status and therefore it should also eventually contribute to improving your FICO score as well. The longer you maintain a well-paying job, the longer you will be able to build your savings and most lenders will take this into consideration when you apply for a loan or mortgage.

Paying bills is absolutely essential to improving your credit and your FICO score. You may not realize this but every time you let the hydro bill sit unpaid on the kitchen table or wait so long to pay your phone bill that the service is cut off you will influence your credit rating. The longer you are able to responsibly maintain your bills and pay them off on time in their entirety the better you will look to the credit bureaus who rate you.

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