What Is A Good Equifax Credit Score?
A good Equifax credit score is a score that tells creditors that you are a responsible borrower who has a good payment history and is capable of managing debts as and when they are due. Equifax credit scores are from 300 up to 850 with high credit scores meaning that the credit risk of the borrower is low. In general, a rating above 720 is good while a rating below 580 is considered bad or poor. However, each company that offers a loan can set its own rules regarding credit scores.
Equifax Credit Score: What It Is Made of
The Equifax credit score is determined from the Equifax credit report which contains some information about the consumer. This includes:
- Credit behavior – Whether you have been regular in paying your credit bills such as credit cards, auto, student, and mortgage among others. And this makes up 35 percent of your total score.
- Credit utilization – the balance that is due on the credit cards and the total credit that is available in your credit report. As for your score, keeping this low with 30 % or less usage is beneficial. This category is 30 % of your final score.
- Repayment history – This one goes well with the length of credit history and the longer one has been using credit accounts the better. History constitutes 15% of your score.
- Credit type - Ideal credit type including credit cards, retail accounts, installment loans, as well as a mortgage. This is 10 percent of the score.
- New credit accounts – Applying for many credit accounts within a short duration is likely to increase your chances of being classified as high-risk and thus have a poor credit score. New credit that is assessed by 10 percent of the score provides an account for new credit.
What Are Good Equifax Credit Score
The Equifax credit score scale shows that anything above 720 falls under the excellent credit rating level in the eyes of lenders. Favorable credit scores are normally enjoyed by borrowers who are likely to secure credit products at the most attractive rates. People with high Equifax scores can afford credit cards and loans with the best and cheapest interest rates. It also makes you an ideal tenant to landlords checking credit scores since your repaying of loans to credit facilities will be shown to be excellent.
To obtain an excellent Equifax credit score
If your Equifax credit score is not yet excellent, taking steps like these can help improve it over time:
- Ensure you promptly make all payments including; Credit cards, utilities, and rent among others. In case of need, set up autopay or reminders and always stick to them. If I have to narrow down the most crucial factors that affect credit score, then I will have to say payment history.
- Manage credit card balances responsibly, it should not exceed thirty percent of the credit limit. High debt usage decreases credit utilization, below listed are the effects of high debt usage on credit utilization;
- Avoid submitting new credit applications as often as it is possible. This is … Another factor that can decrease scores is an excessive number of new accounts.
- Maintaining credit accounts that one has been using for some time is a good way to establish a credit history. It is however important to note that different clients having long-standing relationships have a positive influence.
- Go to annualcreditreport. com and request your credit report from Equifax, Experian, and TransUnion to report any mistake that leads to low scores. An error can be challenged and it has to be done in a specific way.
- There are free services that inform you on Equifax and other credit scores so sign up for those. Credit Karma and Credible are two service providers that let you monitor your credit reports and credit score for free.
This is important when it comes to improving credit scores as it is a slow and steady process. Find time to check your Equifax credit score occasionally, especially when you are working hard to build a good credit score record. To avoid missing out on good deals from lenders when financing big-ticket expenses and other requirements, it is important that credit is closely monitored and scores maintained in good standing.
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