Equifax Credit Score
Here are the top, most common negative score factors. Note that the specific wording given by your lender may be different:
- Serious delinquency
- Serious delinquency, and public record or collection field
- Time since delinquency is too recent or unknown
- Level of delinquency on accounts is too high
- Number of accounts with delinquency is too high
- Amount owed too high on accounts
- Ratio of balances to credit limits on revolving accounts is too high
- Length of time accounts has been established is too short
- Too many accounts with balances
Note that the specific wording given by your lender may differ.
A credit score is a statistical formula that translates personal information from your credit report and other sources into a three-digit score. For example, when you fill out a loan application, pieces of information from the application along with information from your credit report will be used to compute a score that indicates to the lender the statistical probability that you will become delinquent on the loan.
Unless otherwise indicated, all credit scores provided with our products are Equifax Credit Scores. By this, we mean all credit scores are prepared by Equifax and make use of the Equifax Risk Score which is a proprietary credit score model developed by Equifax.
It is important to understand that a credit score is only one criterion that a lender will use in making decisions. For example, in mortgage lending, the lender will take into account the property being purchased and the homeowner's equity. Many lenders look at their relationship with the customer, which may include other financial services. Each lender will have its own policies and you should feel comfortable asking a credit institution about these. Our work with credit grantors has shown us that most lenders want their customers to have a better understanding of their lending processes.
It takes time and there is no quick fix for eliminating past aspects of your credit history that may be negatively affecting your credit score. Here are some illustrations of the examples of creditworthy behavior:
- Pay all of your bills on time. Paying late, or having your account sent to a collection agency has a negative impact on your credit score.
- Try not to run your balances up to your credit limit. Keeping your account balances below 75% of your available credit may also help your score.
- Avoid applying for credit unless you have a genuine need for a new account. Too many inquiries in a short period of time can sometimes be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties, or overextending yourself by taking on more debt than you can actually repay. A flurry of inquiries will prompt most lenders to ask you why. However, most scoring formulas will not penalize you if, for example, you are shopping for the best mortgage rate or the best car loan.