Is this true? Well there isn’t such a thing as a universal credit rating no, but there is, as with anything else, a level on which you are compared when it comes to obtaining credit, loans, mortgages etc. This should explain a little more…
Credit scoring is probably something you’ll hear a lot of these days, and you’ll have heard it if you’ve applied for anything that requires credit. However, if you are turned down based on your credit scoring, you need not panic because contrary to popular belief, this is not the same for every lender. All lenders have their own model of an ideal customer and they compare you to this when they make a decision whether or not to give you credit. A credit score is something that will decide what sort of credit you are likely to get, if any at all, and this will include things like interest rates and repayment programmes etc.
You should not despair if you’re turned down by lender, and certainly not consider that you’ve got a bad “credit rating” or that you are “black listed”. To begin with neither of these even exist. It’s more likely a case of sometimes you don’t fit the criteria that they themselves are looking for. You see, whilst you are looking for a lender, they are looking for people to borrow, but just as you look for the right lender, they look for the right borrower. You may well be financially secure but just not what they look for based upon their ideal customer.
As ridiculous as this sounds, many lenders actually look for people who already have credit, loans and mortgages in order to gauge whether or not they are financially viable. It makes absolutely no difference if you’ve never been in debt before and you have a good job these days. They would rather gauge you on old debts!
Tags: credit rating, credit scoring, loans