The first thing your lenders take into account when dealing with a possible client, is first and foremost a numerical rating, called the credit score, which will tell them if you are a worthy person, responsible and if there might be any risk involved. Basically, the credit score is a numerical rating of your credit worthiness and nevertheless, how banks actually see you. How does it work? Very easy: this rating will tell the bank whether or not you will be a good debtor. A low credit score means a greater risk for the bank, while a good credit score assures them that you will be a good debtor, who is likely to pay back the money and the interest, and of course, determine your eligibility.

You may ask yourselves how the bank learns about this score, in the first place. Every person’s transactions are kept in a record, and every time you apply for a loan, get a credit card, open a new bank account, rent an apartment, purchase a car, financial institutions are the ones that track down your credit report, later used to calculate your credit score. Credit reporting agencies are the ones that provide every bank with your credit report and history. The financial life of every individual is like an open library, which every bank and financial institution is in title to open, and thus be the judge of you as a debtor. That is why we had better insure ourselves with a good and clear credit score.

To obtain a lower interest rate you should first work on bring up your credit score.