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 advice.

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