Credit scores are an extremely important part of your financial life. All the people that will ever check your credit will look at your score for many reasons. Creditors determine whether you're qualified for credit: the higher your credit score, the lower the interest rates you pay on credit cards, mortgages, etc.

The Three A's

Ability: Based on your income, will you be able to take care of the debts you have?
The main factors of convincing a creditor to accept your application is your job, stable home and of course good credit history.

Assurance: Do you have possessions creditors can take from you if you don't maintain payments on your debt?

Attitude: The type of financial character do you display. For creditors, signs of stability include owning a home or maintaining a long residency is a good thing. They like to know where to find you in case all goes wrong.

Your Credit Score

Creditors have developed a system where they can judge people's money income and reliability. It is basically a statistical summary of your credit file calculated using data and mathematical algorithms. Factors likely to encourage a favourable score might include home ownership, a decent paying job, college education or a well organized payment plan.

• Amount you agreed to be financed
• Applicable annual fees
• A.P.R. (annual percentage rate)
• Instalments details: number and amount of monthly payments
• Method of calculation and how it is worked out
• Number of days in grace period before payment deadline
• Size of the actual credit and who actually issues it
• Credit insurance, if applied for, how your debts will be paid if should you pass away