What influences my credit rating?

What influences my credit rating?

These factors determine your creditworthiness. When it comes to lending or hire purchase, the most important thing is that your solvency is ensured. Therefore, you should know what affects your credit rating.

What is credit rating

Companies and banks alike have an interest in customers paying their bills reliably. The credit check determines whether a contractual partner can meet his payment obligations on time. This ensures that there are no defaults when taking out emergency loans, for example. On the one hand, the credit rating reveals whether a person is economically able to pay off their debts. On the other hand, it makes it possible to assess payment behavior. Often the creditworthiness is the decisive factor in whether a contract comes about at all or under what conditions. Mobile phone contracts, purchases on account or credit inquiries are generally rejected if the contract holder is not considered to be creditworthy.

This has a negative effect on your credit rating

If loans for bad credit fail to meet their payment obligations as agreed, this has a negative effect on their score. If, for example, you do not pay the installments of your car loan in accordance with the contract, this is considered to be poor payment behavior. A loan canceled by the bank, an entry in the debtor register or an open invoice also damages your creditworthiness and can lead to negative features at credit scores. Insolvency or dunning procedures mean an increased risk of default. Likewise, if you make a lot of credit inquiries, it will have a negative effect on your score. Especially with larger sums, for example for mortgage lendingare necessary, it is common to obtain various offers. Unlike a regular loan request, this has no negative impact on the borrower’s creditworthiness.