The dictionary definition of credit rating is “an estimate of the ability of a person or and an organization to fulfill their financial commitments based on previous dealings”. Indeed in the current dynamic economies, its worth for everyone to take time to manage and make good their credit score. It long ceased to be all just about as to whether you can get loans, credit cards, and mortgages. It affects bank accounts, mobile phones contracts, monthly car insurance and so on. Offered here is a summary of what maintaining a sound credit rating might involve
*Make key payments on time
The argument might be we work to pay bills or rather bills get us working. Take house rent for example, some real estate agents charge commissions as high as 30% for late payments with the rate doubling for cases of non-payment. Such can be avoided by prompt payments.
*Credit debit cards debate
Everything has the good and the bad. Money matters, credit cards put at your disposal money that is not yours to use now and pay later. For debit cards on the other side you only consume money you have earned. Credit cards have huge bearing on credit rating, most allow up to sixty days interest free period after which defaults attracts exorbitant penalties.
*Banks, banking and Loans
Banks exist as a balance between surplus savers and deficit borrowers. They thus hold huge chunk of information (presented in bank statement displaying ones banking transactions in a span of say six months period or there about ) in as far as credit rating is concerned.
*Credit Bureau Reference
Denoted as CBR; its directory of peoples credit history accessed at a click of a button. The rule here is simple, make financial obligations just in time visa vis managing debt income ratio. Serial defaulters are blacklisted and barred from accessing financial services.
*Alternative income channels
It’s advisable to have at least two channels of income since overdependence on one for instance predisposes you to not meeting financial obligation deadlines when liquidity is not guaranteed.