Credit Scoring
Your credit score is the calculated probability that you will be able to repay a loan, and the way in which lenders determine the risk involved in lending money to you. The credit score is beneficial both to you and your lender: it ensures that the bank does not lend money to someone who will not be able to pay off the debt, and ensures you only borrow what you can reasonably afford to repay. Your credit score has a direct effect on whether your application is accepted, how much you are lent, and which interest rate you are charged.
Do not be discouraged if the first lender you approach rejects your application; different lenders use different criteria to determine and assess credit scores, and it is possible that your loan application may be approved elsewhere. However, it is important to remember that each time you apply for a loan the credit check is noted in your file: numerous unsuccessful applications will have a negative effect on your credit score.
For further information, see:
