Credit Rating Score
You credit rating is represented simply by a credit score. A a good score can make a difference with lower interest rates.
What is a credit score?
A credit score is what lenders use to determine
whether or not they want to lend you money. It
is based on your previous credit history, and
then it is compared to the statistics of millions
of other borrowers. The higher your score the
more likely they think you are to repay the loan.
Paying late or going over your credit limit will
lower your score. However, paying on time will
help increase your score.
What factors are considered in your score?
A few examples of things which will affect your
- Paying on time
- Long term Accounts
- Low debt to income ratio
- Not too much unused. available credit
- Not too many cards or revolving credit
- Good job history
- Too many or too few revolving lines of credit
- Late payments, missed payments
- Too high debt to income ratio, too many accounts.
- Number and type of recent inquiries
- No history reported
- Defaults, delinquencies, legal action or
- Unstable job or residential history
These items do not carry the same weight as each
other in determining you credit score. Minor credit
cards carry less weight than major ones or mortgages.
However, the single most important issue is PAYING
YOUR DEBTS ON TIME. If this is the only thing
you do you can maintain or improve your credit
The Fair Isaac and Company has the model used
most often by lenders when determining your credit
score. This is called the FICO score and it uses
the positive and negative factors listed above
to determine a credit score.
||To check your credit score, click here.