Equifax is one of the three major credit reporting bureaus. The other two are TransUnion and Experian. These three agencies keep records of your credit history and then assign you a score based on those records. When an item is reported to Equifax, the agency determines whether it is a positive which increases your score or a negative which decreases your score.
Effects of Credit Reporting
Equifax assigns you a credit score, called your FICO, because it was developed by the Fair Isaac Corporation. This score is what lending institutions and credit card companies look at when you apply for loans or a credit cards. Credit scores are a signal of your financial health. For example, if you filed for bankruptcy, that is the most negative item you can have on your credit report. Equifax, under the Fair Credit Reporting Act, must keep that notation on your credit report for up to 10 years.
Components of a Credit Score
While there are five components of your credit score, two combine to make up 65 percent of your Equifax credit score. Your payment history your ability to pay on time accounts for 35 percent, while the amount of debt owing is another 30 percent the more you owe, the lower your score. The length of your credit history makes up 15 percent so younger people with a shorter track record are hurt in this are. Obtaining new credit accounts for 10 percent, as do other factors, such as having a mix of credit types.
What a Good Score Gets You
Credit scores range from 350 to 800. Most Americans are in the 600 and 700 range. At minimum, you want to have a credit score of at least 600, otherwise, lenders may consider you to be too much of a risk. A higher score gets you, for example, a better deal on your mortgage. Those with better scores, which shows lenders that your are financially responsible, will pay lower interest rates because banks feel there is not as much risk associated as opposed to someone with a lower score.
Repairing Your Score
If your credit score needs to be repaired, you need to work on creating positive news in your credit reporting. Contact Equifax for a copy of your credit report. Review it to ensure there are no errors. Then, look at the components of your score and work on fixing those. For example, if you are constantly missing payment deadlines, work towards paying on time. Set up automatic bill payments if you are forgetful. Reduce your debt levels to around 30 percent, meaning if you have a credit limit of $10,000, try to keep your amount owing to around $3,000 or less.
Equifax
Equifax began in 1899 by brothers Cator and Guy Woolford as Retail Credit Company in Atlanta. It grew for may decades, opening offices across the country (300 by the mid-1960) and changed its name it Equifax in 1970, which comes from the phrase "equitable factual information." Equifax is the largest credit bureau in the United States, according to its profile. It provides this same information to clients in Canada and many countries in South America and Europe. The company is based in Atlanta.
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