A credit rating is one of those things you’ve most definitely heard of, but may not fully understand. Quite simply, a credit rating is an estimate of your ability to fulfil financial commitments, based on your history of spending, earning, and repaying debts in a timely manner. You credit score is a bit like a fiscal CV; it’s a record of past achievements, and an indicator of how you’re likely to perform in the future.
The method for calculating an individual’s credit score differs from lender to lender, but the basic approach is uniform; if you are financially reliable, you are more likely to be accepted for a loan. If your rating is poor, then you risk either being rejected, or being offered the amount you’ve requested at a higher interest rate.