If you want to buy a car, or an automobile, and you want to buy them on credit, then you need to make sure that you have a good credit score. A credit score is that score or that trinity of numbers that help you find out where exactly you stand with your credit ratings.
A credit score is calculated by a machine that takes into consideration all the values that will in any way affect your credit worthiness. These criteria are;
* Your payment history-this is the part that determines to a large extent your credit worthiness. This refers to all the past as well as present borrowings and further details on it, such as credit card payments, debit card payments etc, and most importantly, how punctual you have been in making these payments. Your promptness plays a very vital role.
* The amount owed- the amount owed basically refers to the amount you owe to your creditors. The total amount of money that you actually owe to your creditors does not play as vital as a role in bringing your score down, as the cards play. That is, if you are nearing or if you have reached the top limit of your credit cards, then the chances of your credit rating going down increases to a great extent.
* Credit History- the credit history refers to the extent of time that you have been borrowing for. If you have just started your credit history, then the chances of increasing or bettering your credit stands are doubtful.
* New Credit- new credit refers to the recent openings of any accounts. It means the finding out of the number of recent account opening as well as for how long it has been since the last opening of an account etc.
* Credit Type- this refers to the different types of credit that is being used. Such as mortgages, retail accounts, company accounts etc.
Credit rating score can vary from 300 points to 850 points. The higher the score the greater the chances of getting your loans passed. Acquiring a better credit score enables you to obtain your credit requirements more conveniently as well as, at cheaper interest rates and more time is given to repay the loan. Another benefit that one can avail if you have a good score is the various offers for availing credit.