Improving Your Credit Rating
Written by Michael Martin Leaño
There is no such thing as universal credit ratings. They just don't exist. Every lender out there scores you based on its own standards or "perfect customer" wish list. How well you score depends not only on you, but on your lender as well. Regardless, many people are still convinced that "blacklists" exist, such that they'll do extensive research on how to avoid being "blacklisted" by banks and financial institutions. However, it doesn't work that way. To learn more about banks assess your credit rating in a realistic (and in a mostly case-by-case basis) manner, keep on reading. This guide will teach you how to get your credit files without paying anything, how to work on your credit weaknesses, and how to boost your ability to acquire mortgages and credit cards.
The Credit Blacklist is a Myth
You don't have to worry about credit blacklists because they're as real as the Tooth Fairy, the Easter Bunny, and Santa Claus. Even if you're rejected by one lender, that doesn't necessarily mean you'll be rejected by all of them. Because the perfect customer wish list of any given bank or financial institution differs from each other, there's always hope for you get a bank that best suits your unique financial situation. Regrettably, scoring systems aren't published and they also vary from one lender to another as well as from one product to another. Nothing is standardized or universal for banks when it comes to calculating your credit rating.
They all use different tools, different criteria, official "credit files" from credit agencies, and your past dealings with the company before they make their decision. One specific thing you need to remember when it comes to your credit ratings is that it's all about profit instead of risk. Lenders are under no obligation to lend money, dole out credit, or provide service to just anybody who asks for it. All their financial decisions revolve around what's in it for them and how much money you'll likely make for them.
Check Your Files and Get Errors in Your File Corrected
What this means is that customers who shift debt to 0% cards to avoid interest, who always repay in full, and so forth are the most likely to get rejected because they won't make the bank any money at all. Even though profit is the primary driving force for banks, risk also plays a part in their decision, so if you have bad credit or you're too savvy of a customer to profit from, you'll be rejected both times. If you can grasp the notion that banks exist to create profit, then you can safely make informed decisions regarding credit. As for your credit rating, there are multiple ways to improve it. First off, you should check your files at all times to avoid major rejection and lower your credit rating.
You can pay a small fee in order to see your credit files and try to keep yourself updated on every detail. Unused mobile contracts that can cause credit rejection or possibilities of ID fraud are likelier than you think. While you're at it, you should immediately get all the errors on your file corrected post-haste. If you've spotted errors and discrepancies with your file, then you should write to the agency in order to have it changed. The effort to have it corrected is all for your own good, because the last thing you want to happen is to lower your credit rating and have your credit application rejected because of some errors on your file.