Monday, May 8, 2006

Equifax Credit Rating Definitions

Equifax Credit Rating Definitions

An Equifax credit rating estimates the creditworthiness of an individual based on financial history, assets or liabilities.

Credit History

    Details about your credit accounts including date it was opened, balance, credit limit or punctuality of
    payments are all included.

FICO

    FICO, or Fair Isaac Corporation, produces a credit score of 350-850 and is used by potential lenders that help determine interest rates and consumers' likelihood of receiving loans.

Algorithm

    An in-depth mathematical model used by Equifax to yield a credit rating that uses payment history, public records, length of credit history, new accounts, and inquiries in determining the rating.

Length of Credit History

    Longer credit history can positively affect your credit history as it legitimizes your credit rating.

Risk

    Credit rating estimates the risk a company will have by lending an amount of money or offering
    a type of service.

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