How to Read Your Equifax Credit Score
Now that you've learned how to read an Equifax credit report (possibly from our convenient article on the subject: A Guided Tour of Your Equifax Credit Report), it may be a good time to learn how to read your Equifax credit score.
When you order your Equifax credit score, you're not only getting to see the number lenders will use to evaluate your creditworthiness. You also get a free explanation and evaluation of your Equifax credit score along with advice on how to improve it.
When you receive your Equifax credit score, this is the credit information you will have:
Your Equifax FICO score
Tthe date on which it was calculated, and a bar graph depicting where your Equifax credit score falls in comparison to the credit scores of the rest of U.S. consumers.
The Bottom Line
A detailed explanation of what your Equifax credit score means to you, including an approximation of how easy or difficult it will be for you to get new credit or a new loan.
Key Factors Affecting Your Score
Understanding the exact reasons why your Equifax credit score is what it is will lead you to the precise strategies you can undertake and actions you can take to improve it.
In this section, you are given both the factors that affected your Equifax credit score positively and those that affected it negatively.
The two most influential factors influencing any consumer's Equifax FICO score positively are:
1. If the length of time since your most recent late payment is old or unknown.
2. If you carry a low proportion of balances compared to your credit limits on your revolving
charge accounts.
Any derogatory factor influences your Equifax credit score in 3 different ways:
1. how often
2. how recent
3. how severe
This explains why correcting an inaccuracy in your credit report or paying off a debt (whether past due or not) may improve your score right away but may not. The lesson here is that solving problems with your credit isn't nearly as important as avoiding those problems in the first place.
The two most influential factors influencing any consumer's Equifax FICO score negatively are:
1. If you have evidence of delinquency (past due payments) older than 60 days. The remedy for this factor is to pay those past due bills first. It will not remove the delinquency from your credit report, but it will, in combination with other factors, improve your score.
2. If you haven't had credit for a very long time (in other words, if the length of your overall credit history is short). The only remedy for this factor is patience and consistency in paying your bills/minimum payments on time.
Incidentally, if you don't have an Equifax credit score, it is probably because you haven't had a single line of credit open for longer than six months.
Equifax refers to its version of your FICO score as your BEACON score. If you see the term Equifax BEACON used, consider it interchangeable with Equifax FICO score.
Armed with how to read an Equifax credit report and how to read an Equifax credit score empowers you to truly to charge (pun intended) of your credit situation.
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