Equifax is a credit reporting company. An Equifax credit rating is a numerical representation of a borrower's credit history. Lenders use the credit rating, or score, to determine a borrower's creditworthiness to repay a new debt.
Significance
A credit rating, or score, reflects a borrower's debt repayment history. The higher the credit score, the more likely a borrower is to repay the debt.
Function
Not only do lenders use a credit rating to determine likelihood of repayment, but potential employers use it to determine if a potential employee would manage their business and personal affairs properly.
Types
There are three credit bureaus, Equifax, Experian and TransUnion. The credit scores issued by the bureaus for each borrower are different, because their calculation techniques are different.
Considerations
Borrowers should review their credit ratings before making major purchases to ensure that errors in reporting do not negatively impact their credit rating.
Warning
Borrowers need to immediately report any errors found in their credit rating. Some errors are easy to remove, while others may require the assistance of a lawyer.
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