Equifax Credit Score - Why is it important?

Here's what you need to know about your Equifax credit score

Purchasing a new house or a new car can be an exciting experience for anyone who is doing it for the first time. It can also turn out to be a stressful and disappointing situation if your loan approval is denied because your Equifax credit score is not as good as it should be. There are a number of things you should know about your credit score before trying to make a purchase.

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Before you can understand what determines your credit score you must understand what the Equifax credit score scale is and what it represents. The Equifax credit scale is a measurement of a borrower's creditworthiness or how much he or she can be trusted when money is borrowed out to them. This essentially is a scoring of their ability to pay back the debts that they owe. The Equifax credit score can range from 300 to 850, with 300 being at the lower end of the spectrum with regard to how creditworthy an individual is.

When it comes to the different levels on the scale, there are certain breakpoints that hold a fairly significant meaning. If your credit score falls below 600, then that is considered to be a poor credit score and it is not likely that you will be approved for a lone. If your credit score is 750 or higher, then that is considered to be an excellent credit score and you are more likely to be approved for a loan.

Equifax Credit Score:

Your credit score is important for a number of different reasons. First of all, your credit score is important because it helps lenders decide if they are going to borrow money to your for your purchase. Buying a house expensive, and the chances of having enough cash on hand to purchase a home outright are very slim. This is why many have to borrow money when making this type of purchase.

If you have a low or poor credit score, then you might not get approved for a loan which means you won't be able to purchase your home. Not only will you be able to get a loan for your purchase when you have a good credit score, but you will also get a better interest rate on your loan which means it will cost less in the long run.

There are a number of things that go into your credit score, and each of the credit bureaus have their own way of computing your total score. The different factors that are used in determining your Equifax credit score. Some of the different factors include your payment history, public records, length of credit history, number of accounts, number of inquiries, and number of accounts.

Payment History

The payment history can affect your credit score one way or another. Having record of late payments on record can negatively affect your score.

Public Records

Public records such as bankruptcies, collections, and other types of judgments can lower your Equifax credit score.

Number of Accounts

Opening a lot of credit accounts in a short period of time can affect your credit rating.

Number of Inquiries

Any time you or a potential lender requests a credit score to determine suitability for borrowing, an inquiry is created. Too many inquiries in a short period of time can negatively affect your credit score.

However, checking your own credit scores will not lower your score. You should check your Equifax, Experian, and Transunion credit scores on a regular basis.