Our credit score is something we may closely monitor to ensure appropriate decisions are made. As a consumer, it is important we think about how decisions can affect the chances of becoming creditworthy.
A credit score refers to those techniques a lender undertakes in determining whether a consumer can be granted a loan (Thomas, Crook & Edelman 2017). It assesses the likelihood of a borrower handling economic scenarios they may face in the short-term and long-term (Thomas, Crook & Edelman 2017). A credit score will determine if a consumer is deemed creditworthy or uncreditworthy (Thomas, Crook & Edelam 2017).
To be creditworthy, we can be offered exceptional offers from our banks. Obtaining a high credit score provides us the ability to have greater negotiating power, borrowing higher amounts, a better opportunity to be accepted for a credit card or loan approval, and a lower interest rate (CANSTAR 2019).
Therefore, consumers may carefully and strategically monitor their spending to avoid a poor credit score. They may change from paying their bills late, to paying them on time. Additionally, they may save more of their weekly income in order to consistently pay extra on their current loans. This idea will therefore alter the consumer’s behaviour, as they are becoming more conscious when managing their earnings.
References and further information:
Cafe Credit, 2019, image, viewed 10 March 2019,
https://www.cafecredit.com/credit-score-range
CANSTAR, 2019, Perk Alert – 4 ways a high credit score could boost your finances, CANSTAR, viewed 10 March 2019,
https://www.canstar.com.au/credit-score/what-to-do-with-a-high-credit-score/
Thomas, L, Crook, J and Edelman, D, 2017, Credit scoring and its applications (Vol. 2), Siam, viewed 10 March 2019,
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