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Arisa [49]
3 years ago
5

Identify factors affecting an individual’s credit rating

Business
1 answer:
Alex Ar [27]3 years ago
8 0

Answer:

There are several factors affecting an individual's credit rating. Among those, some of the significant ones are given:

1. Payment history

2. Amounts owed

3. Credit mix and types

4. Length of credit history

5. Current credit

Explanation:

1. <em>Payment history</em>: It means within how many days or periods an individual has completed the payment. If the individual missed a bill by a couple of days, it would cause that person's credit rating.

2. <em>Amounts owed</em>: It means how much money the individual owes from the overall credit accounts. Specifically, the total loan amount.

3. <em>Credit mix and types</em>: If his loan includes student loans, mortgage loans, auto loans, etc., this credit mix will also increase the individual's credit rating.

4. <em>Length of credit history</em>: The age of the person's earliest credit account, age of his current account, the average age of the current account, and whether the individual has used that account.

5. <em>Current credit</em>: If the individual takes new loans very often, it will decrease his credit rating. Therefore, the person has to think twice before applying for credits.  

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