How Do Credit Ratings Work?

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Credit ratings are created by three different rating agencies in the United States. A credit score can be affected by credit card balances, employment status and cash flow. Maintain a good credit score to show potential employers and loan agents responsibility with advice from a registered financial consultant in this free video on credit scores.

Part of the Video Series: Money Management
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Video Transcript

This is financial adviser Patrick Munro talking about, "How do credit ratings work?" Credit ratings are rated by credit rating agencies. So it's important that you become familiar with the following three names: Equifax, Transunion, and Experian. Those are the three American credit rating agencies for retail consumers and you have a credit rating whether you know it or not with each one of those rating agencies. Hopefully your credit rating is good and you can always make it better by keeping your credit card balances down low, keeping a steady job, keeping as much cash in your life as available and that is important for you to have a credit rating. A credit rating will affect how you are hired at your next new job. It affects whether you're going to get a mortgage or a better apartment because all these vendors and services will use credit card information to find out how responsible of an individual you are. So it is a system and it's important to stay within the confines of that system and constantly try to make yourself better, moving forward in challenging economic times. This is Patrick Munro talking about credit reporting agencies.


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