What is a Credit Rating?
Whenever you borrow money or pay a bill, you add information to your credit history. Since there are so many of these transactions, it wouldn’t be possible for a banker to review each one manually. That’s why the “credit rating” was created.
A computer reviews all your bill-paying habits and gives you a score between 300 and 850, showing lenders how reliable you are at paying bills.
Your credit rating plays a big role in your life. It affects whether you’re approved for loans, the interest rates you receive, and even job opportunities—since some employers check credit history to see your financial habits.
Landlords may also check your score before you sign a lease. It can even influence how much you pay for utility deposits or insurance premiums.
So, how is your credit rating determined, and can it be improved?
Credit Rating Basics
Your credit rating is based on information gathered by major credit bureaus from companies you owe money to. These bureaus use a formula developed by the Fair Isaac Corporation (FICO).
The formula considers factors like your payment history, debt levels, and other financial details. In the U.S., the average score is around 720. A score below 620 often means higher interest rates or even loan denial.
To see what’s in your credit report, visit annualcreditreport.com. You can check your report for free once per year. There’s a small fee if you also want to see your actual credit score.
When you apply for a loan, creditors review both your income and your credit rating. Based on these, they decide if you qualify for the loan and what interest rate you’ll pay.
Getting Money With a Bad Score
If you have a poor credit score, that doesn’t mean you can never borrow money. Your score changes monthly based on your financial behavior, so you can improve it over time. Paying your bills on time helps increase your score gradually.
If you need cash right away, you still have options. For example, if you own a vehicle with a clear title, you can apply for an auto title loan. This lets you borrow against the value of your car, using the title as collateral.
The loan is based on your car’s value—not your credit history. You’ll get your title back once you repay the loan. If your lender reports your on-time payments to the credit bureaus, a title loan can actually help improve your credit score.
Embassy Loans is Florida’s leader in title loans and can help you get your credit moving in the right direction. Give us a call today, and let’s work on improving your financial future together.
Call Embassy Loans today at (833) 839-2274 to get started!
