What is a Credit Rating?

As you know, all banks first question the customer’s Credit Grade in order to consider their loan applications. The credit rating of the customers with higher credit ratings is higher. However, I cannot say that every customer who has a high Credit Rating can use the Credit for sure. What is a Credit Rating? What is the credit rating?

 

What is a Credit Rating?

Through the Credit Reference System (CRS), banks share some information about credit and deposit customers among all banks and financial companies that are members of the KKB . Members (Banks) can access this information through KKB in order to carry out credit transactions of their customers and to extend loans to their customers or to obtain customers. This data source (CRS) sets out the customer’s 5-10-year credit history and enables interbank transactions to be made on the Credit Rating . The negativities you will experience with the banks will cause this grade to fall.

This system, which sets out the previous credit histories of all customers in detail, includes all loan applications of the customers within the last 5 years (10 years according to the new regulation) , previously used credits and all payments made or overdue payments made on these loans. This system will reveal the past credit record of the customers who will apply for credit. Each bank has its own system and credit approval process. Based on past credit inquiries from banks through the CRS system, the customer reveals the future payment performance plan and starts the credit valuation process.

 

Credit Rating is a system developed in line with this need

This is a risk – performance report applied by KKB (Credit Registry Office) in order to estimate the negativity in the repayment of the loan obtained or to be received from a bank or finance company which is a member of KKB. To put it differently, it aggregates the turbulent crowd of information on the CRS system on a single note (points) and accelerates the credit evaluation process of the bank or financial institution. Instead of a detailed review and comment on the CRS system, the Bank takes into account the Credit Rating , which has already been interpreted, and accelerates the process.

 

How does the Credit Rating System progress?

Notes 1-699 are the most risky and difficult to use (obtain approval) of bank products. 700-1099 is considered moderate risk, 1100-1499 less risk, 1500-1699 good and 1700-1900 are very good as divided into 5 groups. This is the credit rating system. In order for your credit or card applications to be approved in banks, this grade should be determined as at least medium risk .

 

Circumstances Causing Credit Rating to Decline

A person’s credit rating is low, does not indicate that the person has a debt that has not been paid in the past. Of course, in general, if the person’s rating is low, it may be possible to find a debt that has not been paid or delayed in the past. However, it may vary in some cases. For example; Person X has previously kept his relationship with banks sparse and wants to use credit. As banks are less familiar with Person X , the score transmitted by KKB may be low. The fact that there is no record of transactions and registrations in the past, and the low and incomplete relationship with the banks may also be considered as one of the effects that decrease the rating of the person. Using bank products on a regular basis and not disrupting payments will have a major impact on your score. At the same time, the loan evaluation process of newly-aged, under-age individuals takes slightly longer than normal. What is your credit rating, we hope you understand better. Thank you for reading our article that answers all your questions about what a credit rating is.

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