Credit is an important issue for all people. Whether you want to take out a mortgage to purchase a home, or simply want a loan to get a bit of extra cash, your chances of getting approved are slim to none if you do not have a good credit rating. There are different credit bureaus, with Equifax as one of the leading consumer credit reporting agencies in the United States. The Equifax credit score range spans from 300 to 900. The higher your score, the more favorable lenders look upon you as a credit risk and the more likely you are to get approved for any loan you apply for.
It is important to understand that there are different factors which go into the determining of your credit score. The majority of people score in the 750-799 score range, which is acceptable. For these people, they should get approved for loans but would certainly have a more difficult time or get higher interest rates than those with a higher credit score. There are always ways to improve your score, even if you have a very poor or even no rating at this time.
Before you can improve your score, you need to be aware of what your credit score actually is. Considering that it can change even from one week to the next, it is important to obtain a copy of your credit report at least once every six months, and certainly right before you start to work on your credit. You can obtain a free copy through the mail, or go online and order it directly.
Start paying off your debts. This is obviously easier said than done in most cases, but even if you only make minimal payments toward each debt, at least you are showing that you are making an effort and not just ignoring the debts you still owe. You may choose to work on paying off one bill at a time, or spread the money out evenly between your debts. Stay in contact with your debtors, to prevent them from taking further measures, when possible. As long as you show that you are trying and are working to pay off your debts, they should be friendly and willing to work with you. Some debtors will even be willing to lower your total debt amount, simply to have you get it paid off sooner.
Credit cards are okay to have, but you need to have the control to not max them out and in fact, keep the balance below 10% of the card limit if possible. This keeps your balance to limit ratio low, improving your credit score significantly over time as a result. One of the biggest mistakes people make is thinking that as long as they make their credit card payments on time, they are in the clear, when in fact the balance to limit ratio is an even bigger contributing factor to your credit score overall.
With these tips, any person can work toward improving their credit score and improve their ranking in the Equifax credit score range. It can take time, but with some work and dedication on your part, you can certainly change your credit score for the better.
