Credit Rating and Credit Repair
There’s a relationship between credit score and credit repair. If your credit score is 600 or even below, credit repair is needed so that you will always be in good standing.
Yet what is a credit rating? It becomes an indicator that tells creditors if you are credit worthwhile. A simple way of achieving this is to encode specific things about you in the computer and within seconds, they are going to see the results show up on their screen.
Credit rating ranges from 350 to 850 so that as mentioned earlier, any score of Six-hundred or below isn’t good because if you apply for any loan, you will be paying higher interest rates compared to someone who has a great rating of 700 or above and this is normally based on 5 factors.
Very first, the number of inquiries you have made in the past 2 years. Did you apply for a loan or a credit card? Should you did and this was approved, then as long as you pay it on time, you will have a good credit ranking.
Second, what types of credit you actually have? If you have funds, then that is good. If you dont, well dont expect to have a high credit rating.
Next, what is the length of the credit? People who have a type of credit for 5 years or more have a better credit score compared to someone who merely graduated from university.
Fourth, how much can be your debt? It is alright to have debt every now and then as long as you are able to pay for it. If you dont owe money in order to anyone, then excellent because this will be shown on your high credit ranking.
Lastly, what is your own payment history? This really is somehow connected with the length of credit because this will show if you have been able to make obligations on time. If you overlooked a payment that may be bad but if you’ve not, then you should have a great credit rating.
All these five factors are essential. So you can see if you’ve got any problems, obtain a credit report from one with the three crediting agencies namely Equifax, Experian, and Trans Union.
You can get a copy from each one at the same time or take action at different times of the year. This record changes so you need to obtain a copy yearly.
One thing you might observe looking at the different reports is that they may not usually reflect the same thing. At these times, dont be alarmed simply because each one uses a different set of protocols in coming up with those numbers.
However, should some thing there be outdated or mistaken, this particular must be corrected. If you possess the supporting documents, write a letter and deliver this to the credit agency.
If what the statement says its true and you’re simply in a lot of trouble, then steps have to be come to initiate credit repair. You can do this by yourself or with the help of a counselor.
Regardless of who will be involved, only one point is certain and that paying down whatever outstanding credit card debt you have is the only way to improve your score.
Dont expect that your loan application will be approved should you credit rating is not great. Do something about it because credit repair is the only option.