Credit Rating and Credit Repair
There exists a relationship between credit rating and credit repair. If your credit score is 600 or below, credit repair is needed which means you will always be in good standing.
But what is a credit rating? This is an indicator that informs creditors if you are credit worthwhile. A simple way of doing this is to encode specific things about you in the pc and within seconds, they are going to see the results appear on their screen.
Credit score ranges from 300 to 850 and as mentioned earlier, the score of Six-hundred or below is detrimental because if you apply to get a loan, you will be paying higher rates of interest compared to someone who has an excellent 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. Did you apply for a loan or a credit card? If you did and this was approved, then if you pay it punctually, you will have a good credit rating.
Second, what types of credit you really have? If you have funds, then that is great. If you dont, well dont have a much a high credit rating.
Next, what is the length of the credit? People who have a type of credit for 5 years or even more have a better credit ranking compared to someone who merely graduated from college.
Fourth, how much is the debt? It is okay to have debt once in a while as long as you are able to shell out the dough. If you dont owe money to be able to anyone, then great because this will be mirrored on your high credit ranking.
Lastly, what is your payment history? This can be somehow connected with the length of credit because this can have if you have been able to make payments 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 several factors are equally important. So you can see if you’ve any problems, get yourself a credit report from one from the three crediting agencies particularly Equifax, Experian, and Trans Union.
You can aquire a copy from every one at the same time or do it at different points during the the year. This report changes so you should obtain a copy each year.
One thing you might observe looking at the different reviews is that they may not always reflect the same thing. When this occurs, dont be alarmed because each one uses a diverse set of protocols within 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However, should some thing there be outdated or mistaken, this particular must be corrected.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 organization.
If what the statement says its true and you are in a lot of trouble, next steps have to be taken to initiate credit repair. You can do this all on your own or with the help of a counselor.
Regardless of who is involved, only one point is certain and that settling whatever outstanding financial debt you have is the best to improve your rating.
Dont expect that your loan software will be approved if you credit rating is not excellent. Do something about it because credit repair is your only option.