When the bank or credit company decides whether you can borrow money from them, they take a credit report to determine your credit rating.
Different credit reporting companies make slightly different assessments, but your credit rating is always determined by your ability to pay, that is, how you have managed your finances in the past. The credit reporting companies use a scale that rates the creditworthiness of the individuals, the scale can be 1 – 100 or just a three-degree scale.
The credit reporting companies that use a three-point rating assess your credit rating as follows:
- If you have a stable income and have no bad financial past, your credit rating is considered good. If you do not have any major debts and loans, you are ranked and the higher your income, the better your rating.
- If you succeeded in drawing a payment note or more, you get a worse rating. Then your credit rating is no longer as good, which means that it can be more difficult to borrow money and sign a contract / contract, such as a rental contract or a subscription agreement.
- If you have become insolvent, that is, you have such a bad economy that you have a debt with the chancellor, you get a very low credit rating. Then it is almost impossible to take out a loan and sign a contract.
The ability to pay also affects
As you can see, a previously troubled economy may set things right for you, but keep in mind that even your current ability to pay can have a big impact on whether you can get a loan or not.
Your ability to pay is affected by your income and expenses. If you have a high income and low expenses, your ability to pay is considered good even if you have a poor credit rating due to one or more payment concerns.
This means that some lenders can accept payment remarks if your ability to pay is good, especially when it comes to sms loans. There are also banks that can give you a loan with collateral even though you have debts with the kronor bailiff if your ability to pay is good enough, only you settle your debt balance with the bailiff with part of the loan.
Some quick tips on how to get a better credit rating
- Pay your bills on time. The most important and best tip.
- Collect your loans and credits
- Get rid of credit cards you don’t use.
- Use a loan broker, such as CreditAct Finance, to find the best loan options.