Equifax Credit Score: What it is and How to Check?

Equifax is one of the main credit bureaus, or credit reporting organisations. They generate credit reports and credit scores. These are used to establish creditworthiness for individuals and businesses and to compute credit scores.

You can find out more about what lenders or creditors could notice when you apply for credit by looking up your Equifax credit score and report.

Equifax is a multinational company that specialises in consumer credit reporting. This credit reporting company is also available in India as Equifax Credit Information Services Private Limited (ECIS) and Equifax Analytics Private Limited. It is one of the four credit information companies in the country.

 

This means that the company uses trusted and unique data and analytics to assess the credit history and creditworthiness of consumers. Equifax is responsible for computing the Equifax credit score to determine an individual or business’ credit standing.

 

This score, along with the Equifax credit report, also makes it easy for lenders, employers and other interested parties to assess how creditworthy you are. 

Equifax credit score is a 3-digit number that can range from 300 to 900. It is calculated by taking into account factors, including your credit repayment history, credit mix, credit utilisation ratio and more. The higher your Equifax score, the better, which indicates a good credit history. 

 

Your Equifax credit score is a part of your Equifax credit report.

Your Equifax credit report provides a comprehensive overview of your credit history. It shows your borrowing behaviour, repayment patterns, and overall financial discipline. Lenders use this report to assess your creditworthiness when you apply for a loan or credit.

 

The report includes information such as your current and past credit accounts, payment history, outstanding debts, and other relevant financial details.

Your Equifax credit score is calculated by taking into account several factors like the ones outlined below.

1. Your Repayment History

Making timely repayments helps improve your credit score, which in turn makes your overall repayment history look positive. So, ensure that you promptly pay your loans, EMIs and other credit bills as and when they are due.

1. Your Credit Utilisation Ratio

This refers to the percentage of your total credit limit that you use. The lower this ratio is, the better. Ideally, if you limit your credit utilisation ratio to 30%, your credit score will be positively impacted. 

1. The Types of Credit Used

There are different types of credit, like secured and unsecured options. A healthy credit mix can boost your credit score since this is also factored into the calculation of the 3-digit number.

1. The Length of Your Credit History

The length of your credit history also plays a pivotal role in the calculation of your Equifax score. The longer your credit history is, the more data the company has to analyse and arrive at an accurate score.

1. New Credit Enquiries

The number of credit enquiries made is also included in the evaluation. A higher number of credit enquiries shows that you are heavily dependent on credit for your financial needs. This is not a good sign and adversely affects your credit score.

Equifax credit scores range from 300 to 900. The following ranges depict how your creditworthiness is typically assessed:

• 300–579 is considered poor

• 580–669 is fair

• 670–739 is good

• 740–799 is very good

• 800–900 is exceptional

 

The higher your score, the more likely you are to qualify for credit with better rates and terms.

Equifax offers various benefits for its customers. Some of them are listed below:

• Easier Loan Approval

If you have a good Equifax credit score, you will find it easier to get your loan applications approved. This is because you will be considered more creditworthy.

• Lower Interest Rates

A high Equifax score also makes it easier for you to get loans and credit cards with lower rates of interest, where possible.

• Higher Credit Limit

You may even be eligible for a higher credit limit on your credit card, or to borrow a higher amount for a loan when you need to.

• Better Terms and Conditions

In general, a good credit score helps you access credit facilities that have more favourable terms and conditions. 

Some factors can adversely affect your Equifax score. Knowing what they are can help you steer clear of them. Check out the top factors that can bring down your credit score.

• Delayed Credit Card or Loan EMI Repayments

Failing to pay your credit card bill or EMI or paying them past the due date is never advisable because it will directly affect your credit score negatively.

• Too Many Credit Enquiries

If you make too many credit enquiries within a short time, you will be considered a credit-hungry consumer, thus bringing your score down.

• Using Too Much of Your Credit Limit

Using a higher percentage of your credit limit can also affect your credit score negatively. It may be difficult for you to get new credit facilities in this case. 

• Using Only One Kind of Credit Facility

The type of credit you use matters. Relying on just one kind of credit can pull down your credit score, too. 

• A Short Credit History

If your credit history is too short or non-existent, the company may not have much data to use to compute your credit score.

Now that you know which factors are used in calculating your credit score and which factors affect it adversely, you can easily take measures to improve your score if you need to. Here are some ways to do this.

• Pay Your Dues on Time

Make sure you pay your loan EMIs and credit card bills on time. If you are having trouble doing this, you can set up an auto-debit mandate wherever possible.

• Keep Your Old Credit Cards

Keeping your old credit cards, even when you get a new one, helps you retain your credit history. Also, a longer credit history can be beneficial.

• Only Make Enquiries if You Need Credit

Do not make unnecessary credit enquiries. Only do so if you are sure you need a new credit facility.

• Limit Your Credit Utilisation Ratio

Keep your credit utilisation ratio to 30% or lower. For instance, if your credit card limit is ₹1 Lakh, don’t pay for more than ₹30,000 worth of purchases via credit.

Understanding how to read your Equifax credit report helps you stay informed about your financial health. Here is what you need to know:

• Personal Information

This section includes your full name, address, date of birth, and identification details. It may also list previous addresses or any other names you have used.

• Credit Accounts

This section provides details of your current and past credit accounts. It covers open and closed accounts, revolving credit, instalment loans, and your repayment history.

• Credit Inquiries

This part shows who has viewed your credit report. Soft inquiries happen when you or a company checks your credit for pre-approval offers and do not affect your score. Hard inquiries occur when a lender checks your report for a credit application.

 

These can slightly impact your score and remain on your report for up to two years.

• Bankruptcies

If applicable, this section lists any bankruptcy filings, including the type of bankruptcy and the filing date.

• Collections Accounts

This section shows any accounts that have been sent to collections. It may include unpaid debts from medical bills, utilities, or retail credit.

If you find an error in your credit file, you can raise a dispute with the Equifax credit bureau. Here is how to get started:

1. Review your credit report carefully to spot any mistakes

2. Visit the myEquifax portal and head to the Dispute Centre 

3. Click on ‘file a dispute’

4. Provide details of the incorrect information, like name or payment history,  along with any supporting documents

5. The Equifax credit bureau will investigate your dispute and share the outcome

6. Once resolved, you can download the Equifax report to see the updated information

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