What are the factors used to determine your free credit rating?

A loan is an indispensable economic facilitator that is required to help us in meeting our personal goals. There are different types of loan categories that you have to choose from based on your specific requirements. Whatever be the type of loan, you have to be prepared to give detailed information to the lending institution before your application is taken up for consideration by the loan officer based on the rating assigned to you by the agencies.

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Establishing credit is one of the factors used to determine your credit worthiness. To establish a good reputation you must borrow some money and repay it promptly. Some people cannot establish their repayment history especially when they are borrowing money for the first time.


If you approach the banks and financial institutions for a large loan the loan amount is sanctioned based on the sureties and collaterals furnished at the time of borrowing the money. The repayment scheme is fixed. Those who are rated positive are more likely to be approached by other lending institutions based on their credit reports. This is one of the biggest advantages of having a good financial reputation.

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One of the biggest advantages of having a good credit score is that you can get access to debt at favorable interest rates. Banks and other financial institutions have a great degree of leverage on the interest rates that they can claim for a particular type of loan. They will offer a cheaper interest rate to someone displaying a robust repayment capacity and who has a better rating. This can mean that you can save quite a lot of money on interest rates and all you have to do to access these benefits is to display prudent financial behavior and repay your dues on time, every time.

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