A personal credit rating is a score between 300 and 950 points that has existed for three years.
It is given to private individuals and reflects their credit repayment ability.
This rating is used, among other things, when you want to take a loan from a bank or other credit providers.
The calculation of the rating takes into account the equity of the customers, their financial history and how they conduct themselves financially with different entities.
That is, if they pay bills on time, if they have unpaid debts, and other variables.
The Bank of Israel has given licenses to several entities to use its information that checks the financial behavior of customers, processes it with the help of a model and gives them grades.
The higher the score, the higher the probability of getting credit with a better interest rate.
For example, when private individuals wish to take credit from a bank - a mortgage or other loan, or join a certain credit card, the bank will ask the customers for permission to contact a credit rating company to get their score.
The customer's score is not the only factor that will determine whether he will be granted credit, to what extent and at what interest rate.
Additional factors that can be taken into account in this context are, for example, the customer's seniority at the financial institution.
How do I know what my rating is?
It can be updated both through the bank where the account is maintained and through the credit bureaus that deal with these calculations, or through dedicated applications.
In some cases this service is subject to a fee.
A customer with a high rating will not necessarily get everything they ask for.
Thus, it is possible that the interest charged from him will be relatively low, but he will not receive the full amount he requested.
Can I improve my rating?
There are several ways to do this: avoiding repeated checks, avoiding standing orders that have not been honored and delays in loan repayment, and more.
The rating calculation method is such that when moving from bank to bank, the rating is affected, because in the bank to which the customer is transferred, the customer will be considered a new customer.
There is still a lot to know about the subject of our credit rating, so it is better to be interested in it not necessarily at the last moment, when you need credit urgently, but as part of the household's financial management.
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