Crunch Your Credit: Here’s How




Credit scores and rating, they can be a bit confusing can’t they? But those little numbers and figures can have a huge effect on your life. In fact, they can stand in the way of significant life purchases such as cars and homes. So, with that in mind here is a quick guide on what they are and what affects them. So you can crunch the numbers and keep your credit as healthy as possible.


Ratings vs. Scores

Ratings are set out in letters ranging from AAA to D or DDD, with DDD being the worst. They are specifically for businesses and organisation and not individuals. There are 20 -23 categories depending on who you consult, and they are a way of grading a debtor’s likelihood of being a risk.

A credit score is a three digit numerical value that is assigned to an individual borrower that the loan companies use to decide whether to grant a loan and what rate of interest to charge. That means if you are concerned with personal credit you will be working with scores and businesses credit with ratings. Of course, the things that affect them are quite similar and will be discussed in more detail below.


Monthly payments

One of the things that can have the biggest impact on your credit score and so you likelihood as an individual to be granted a loan is your past payment history. This is where a record of all the payments you have made, and missed is collated and provided to the lender you are applying to.

Obviously, if you haven’t kept up with the payment like you should have this will negatively affect your credit score, making it harder to get credit in the future.

If you do find yourself in this situation, it’s best to do something about it rather than skip a payment. This may include the process of debt consolidation as described at, or calling the company to explain your situation. As then you can agree on a reduced payment plan for the time being.


Multiple applications

Something else that can seriously affect your credit rating, that not everyone is aware of, is making multiple credit requests in a short space of time. Remember that you don’t actually have to be granted the credit for it to show on your score. Meaning if you have lots of request for credit all bunched together it can make you seem like an unreasonable risk.

To prevent this do your homework beforehand and check your credit score, so you know that the loans you apply for are likely to be granted. Also, apply for only a few at a time, and wait a few weeks if they are not successful. In addition, if you are looking at credit or store cards and you are concerned about your credit score, try to apply ones like the ones on offer at that give you an instant yes or no without running a credit check. As these won’t make a negative impact on your score, just for the pleasure of applying.

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