Its interesting that one's credit rating is influenced by the level of credit one engages in, in essence your level of indebtedness and your effective ability to service it. It takes little or no account of cash sources, owned outright properties, other financial resources you may have at your disposal.....needless to say under those circumstances I have a relatively modest credit rating.
Not meant in a rude manner but causing me to question my understanding.
Am I missing something as this seems to make sense to me.
Your rating is your ability to service and reliability in payment of credit facilities past and present. So if it were based on anything other than your history in credit agreements it would not be effective.
I agree it is odd that someone with little use of credit (therefore either frugal or cash positive) has a poor rating is odd but they could be terrible at paying on time and so could still risk a poor rating?
