Credit Rating and Credit Repair
There is a relationship between credit ranking and credit repair. If your credit ranking is 600 or even below, credit repair is needed so 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 certain things about you in the computer and within seconds, they will see the results show up on their screen.
Credit ranking ranges from 350 to 850 and as mentioned earlier, the score of Six hundred or below is bad because if you apply for any loan, you will be paying higher rates of interest compared to someone who has a great rating of 700 or above and this is generally based on 5 factors.
Very first, the number of inquiries you get in the past 2 years. Do you apply for a loan or a credit card? If you did and this has been approved, then so long as you pay it on time, you will have a good credit ranking.
Second, what types of credit you truly have? If you have money, then that is excellent. If you dont, well dont expect to have a high credit rating.
3rd, what is the length of your own credit? People who have a distinct credit for 5 years or maybe more have a better credit ranking compared to someone who merely graduated from university.
Fourth, how much can be your debt? It is fine 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 good because this will be shown on your high credit ranking.
Lastly, what is your own payment history? This is somehow connected with the length of credit because this can have if you have been able to make obligations on time. If you overlooked a payment that might be bad but if you haven’t, then you should have an excellent credit rating.
All these 5 factors are equally important. So you can see if you’ve got any problems, obtain a credit report from one of the three crediting agencies particularly Equifax, Experian, and Trans Union.
You can get a copy from each one at the same time or get it done at different times of the year. This report changes so you need to obtain a copy yearly.
One thing you might discover looking at the different reviews is that they may not always reflect the same thing. At these times, dont be alarmed simply because each one uses a various set of protocols inside coming up with those numbers.
However, should something there be outdated or mistaken, this particular must be corrected. If you possess the supporting documents, create a letter and deliver this to the credit company.
If what the report says its true and you are in a lot of trouble, after that steps have to be taken up initiate credit repair. You can do this all on your own or with the help of a counselor.
Regardless of who will be involved, only one thing is certain and that paying off whatever outstanding credit card debt you have is the best way to improve your report.
Dont expect that your loan program will be approved should you credit rating is not excellent. Do something about it because credit repair can be your only option.