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Good credit rating Essay

Dear Sister,

            Your having difficulty in establishing good credit rating may stem from a lot of reasons. You could have forgotten to pay your bills, you paid for them late or you have loan defaults. These may be recorded on your credit file for 6 or 7 years. And believe me, you wouldn’t want this to appear on your credit history.

            First of all, credit is evaluated by different factors. Banks and lending agencies will want to know if you have a clean record of paying your bills on time. This is important because if you do not pay your bills, you will not probably pay them. They will also evaluate your credit history before they can lend you, especially when it concerns a large amount of money. And lastly, they will evaluate your credit rating. Usually, these banks and lending companies use credit score to determine if you are eligible for loan. This credit score is a number which ranges between 200 and 800. If you’ve got a score of 700 and above, then you have great credit.

            To improve your rating, you can start by faithfully monitoring and managing your credit so you can keep track of your

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spending or of any inaccuracies that might occur. Better yet, create a spending plan to keep you from spending on unnecessary things. You should also pay your bills and your debts on time to avoid any negative impact on your rating. If you had problems with your credit history in the past, open a new account and pay on time. If you want to get a credit card, do so. But, manage it responsibly and do not exceed the credit limit. If you have other credit cards, close the accounts you do not use. Also, control your finances by sticking to a budget.   The bottom line is, pay on time. If the banks and lending companies see that you have good credit history, you can pay on time, you have a stable financial status, you have managed your past loans well and your credit rating is good, then they will be confident in lending you.


Fabozzi, Frank J., Steve V. Mnn and Moorad Choudhry. Measuring and Controlling Interest Rate and Credit Risk. United States: Chichester John Wiley & Sons, Inc., 2003.

Parker, Chris. How Your Credit is evaluated.


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