Credit Card Rating
Why Your Credit Card Rating Or
Credit Score Is Important
Your credit rating or credit score is not only an important
statement about you and how credit card companies perceive your
level of credit worthiness. Your positive credit history is also a prized personal asset.
Credit ratings and credit scores are calculated on the basis of
your financial credit history, as well as on any current credit
assets and liabilities you hold. For instance, a mortgaged
home, a car acquired with a loan etc., Your credit rating and
subsequent credit score is therefore an assessment of your credit
worthiness and of your ability to repay any borrowings.
A Good Credit Rating
When you make a credit card application, the credit card company
make a decision by simply using your credit ratings score, along
with the other information in your credit reference agency or
credit bureau file. (You'll recall this information will include
data on the number of other credit indebtedness, your credit
history, payment record, any late or missed payments etc).,
Taking into consideration your credit rating or credit score,
if the credit card company or lender is happy that you meet their
eligibility criteria and that they consider you an acceptable
credit risk, they will approve your credit card application and
send you a credit card acceptance letter, extending you credit.
If you're in any doubt that a good credit card rating score is
indeed an asset, bear in mind that more recently, credit ratings
scores are influencing insurance premium rates and are even being
used to determine whether individuals are eligible for employment,
among many other things. This is one of the benefits of having a
good credit card rating and why it is important to preserve your
credit card history and credit score.
Credit Card - Poor Credit Rating
On the other hand, if when you apply for credit card, your
application is denied, this might, in all probability be down to
poor or low credit rating.
There is no such thing as bad credit ratings, since the mechanics
by which a credit rating agency assesses and score
your credit worthiness, is dependent upon a number of factors. For
instance, an 'across the board assessment' and prediction by the credit rating agency of expected patterns of behaviour of
particular categories of credit consumers.
A poor credit rating or adverse credit card rating is therefore an
indication to credit card companies or credit lenders that you are a likely high risk, with the likelihood of defaulting on your repayments.
It exposes you to paying high rates of interest on any credit cards
you subsequently secure or on any other borrowings you make. It is
therefore in your own interest to do everything you possibly can to
improve your credit card rating.
How To Improve Your Credit Card Credit Prospects
In the event that any of your credit card applications are declined, this might be down to low credit card rating score.
It might be the case that you are new to using credit and have not yet built up a track record showing that you can manage credit card credit responsibly.
It is also worth remembering that lenders draw their credit report data from three credit reference agencies; just because one credit company decline your application for a credit card, does not automatically mean the others will do the same.
More specifically, should you have reasons to be concerned about
your past credit or credit card history, then you will need to take
steps to improve your credit ratings and your chances of getting
approved for credit cards or other types of credit in the future.
While there are no real means of finding out your credit rating or credit card score (these are not made public), there are steps you can take
to check your credit rating report file. For a start, you can obtain
a copy of your credit report from the credit reference agency.
This information will help you to see whether there is any adverse
credit card credit information or otherwise, contained on your
credit report file. Armed with the information, you will then know
precisely what action you will need to take on how to improve your
credit rating score.
The content on this site is purely for information purposes only
and is not intended to replace your seeking professional financial
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