There is a relationship between credit score and credit repair. If your credit ranking is 600 or perhaps below, credit repair is needed so that you will always be in good standing.
Yet what is a credit rating? This is an indicator that informs creditors if you are credit worthy. 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 show up on their screen.
Credit ranking ranges from Three hundred and fifty to 850 and as mentioned earlier, any score of Six hundred or below is bad because if you apply for any 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 have made in the past 2 years. Did you apply for a loan or a credit card? In the event you did and this has been approved, then so long as you pay it punctually, you will have a good credit rating.
Second, what types of credit you truly have? If you have cash, then that is good. If you dont, well dont have a much a high credit rating.
Third, what is the length of your own credit? People who have a type of credit for 5 years or even more have a better credit rating compared to someone who merely graduated from school.
Fourth, how much can be your debt? It is okay to have debt occasionally as long as you are able to pay for it. If you dont owe money in order to anyone, then great because this will be shown on your high credit score.
Lastly, what is your payment history? This can be somehow connected with your length of credit because this can have if you have been able to make repayments on time. If you missed a payment that could be bad but if you’ve not, then you should have a great credit rating.
All these several factors are equally important. So you can see if you’ve got any problems, get yourself a credit report from one of the three crediting agencies particularly Equifax, Experian, and Trans Union.
You can get a copy from each one of these at the same time or take action at different points during the the year. This record changes so you ought to obtain a copy each year.
One thing you might discover looking at the different accounts is that they may not always reflect the same thing. At these times, dont be alarmed because each one uses a different set of protocols within coming up with those statistics.
However, should something there be obsolete or mistaken, this particular must be corrected. If you’ve got the supporting documents, write a letter and send this to the credit organization.
If what the record 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 will be involved, only one thing is certain and that paying down whatever outstanding credit card debt you have is the best way to improve your rating.
Dont expect that your loan software will be approved if you credit rating is not very good. Do something about it because credit repair is the only option.