In the United States, an individual's credit history is compiled and maintained by companies called credit bureaus. Credit worthiness is usually determined through a statistical analysis of the available credit data. A common form of this analysis is a 3-digit credit score provided by independent financial service companies such as the FICO credit score. (The term, a registered trademark, comes from Fair Isaac Corporation, which pioneered the credit rating concept in the late 1950s.)
An individual's credit score, along with his or her credit report, affects his or her ability to borrow money through financial institutions such as banks.
In Canada, the most common ratings are the North American Standard Account Ratings, also known as the "R" ratings, which have a range between R0 and R9. R0 refers to a new account; R1 refers to on-time payments; R9 refers to bad debt.
The factors which may influence a person's credit rating are:[1]
- ability to pay a loan
- interest
- amount of credit used
- saving patterns[not in citation given]
- spending patterns
- debt
RSS Feed (xml)
