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How to Improve Your Credit?

What is a Credit Rating?

Measures the ability of the borrower to repay money.

A high credit rating → Lower risk of default (Default = unable to make payments)

How is a credit rating expressed?

For individuals

A range of numbers
300 – 850
A credit score is derived from a person’s credit history.

For businesses and the government

Expressed as letters
AAA (great) to C (poor)
Moody’s rating ranges from Aaa to D

Why important?

Your credit rating can affect everything:

  • Approval for a loan
  • Interest charged

How your actions affect your credit rating?

Helps your credit rating

  • Paying bills on time
  • Making monthly payments in full
  • Checking credit report & score for accuracy
  • Keeping balance below 50% of limit
  • Taking out a loan
  • Ask for a credit increase
  • Asking the collector to update the credit file after payment
  • Consolidating all credit card debt under a personal installment loan

Hurts your credit rating

  • Missing or late payments
  • Not making the minimum monthly payments
  • Applying for numerous credit cards
  • Exceeding account limits
  • Defaulting on a loan
  • Closing older credit card accounts
  • Having an account sent to collections
  • Filing for bankruptcy

What is a good credit score?

  • Great (730+)
  • Good (680-730)
  • Fair (620-679)
  • Poor (300-619)

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