Credit Rating and Credit Repair
There’s a relationship between credit rating and credit repair. If your credit rating is 600 or even below, credit repair is needed which means you will always be in good standing.
But what is a credit rating? It becomes an indicator that informs creditors if you are credit deserving. A simple way of carrying this out is to encode specific things about you in the computer and within seconds, they’ll see the results be visible on their screen.
Credit ranking ranges from 300 to 850 so when mentioned earlier, the score of Six-hundred or below isn’t good because if you apply for a loan, you will be paying higher interest rates compared to someone who has a great rating of Seven hundred or above and this is usually based on 5 factors.
First, the number of inquiries you earn in the past 2 years. Do you apply for a loan or a credit card? In the event you did and this has been approved, then as long as you pay it on time, you will have a good credit score.
Second, what types of credit you truly have? If you have funds, then that is good. If you dont, well dont have a a high credit rating.
3rd, what is the length of the credit? People who have a distinct credit for 5 years or maybe more have a better credit rating compared to someone who merely graduated from school.
Fourth, how much can be your debt? It is alright to have debt once in a while as long as you are able to pay it off. If you dont owe money to anyone, then great because this will be mirrored on your high credit rating.
Lastly, what is your payment history? This is somehow connected with your own length of credit because this will show if you have been able to make payments on time. If you missed a payment that might be bad but if you’ve not, then you should have a great credit rating.
All these 5 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 aquire a copy from every one at the same time or do it at different times of the year. This statement changes so you should obtain a copy yearly.
One thing you might observe looking at the different reports is that they may not constantly reflect the same thing. At these times, dont be alarmed because each one uses a different set of protocols in coming up with those numbers.
However, should something there be out-of-date or mistaken, this particular must be corrected. If you’ve got the supporting documents, create a letter and deliver this to the credit agency.
If what the report says its true and you’re in a lot of trouble, then steps have to be taken up initiate credit repair. You can do this all on your own or with the help of any counselor.
Regardless of who will be involved, only one factor is certain and that settling whatever outstanding credit card debt you have is the best way to improve your score.
Dont expect that your loan program will be approved should you credit rating is not very good. Do something about it because credit repair can be your only option.