First, find out your credit score and credit risk rating by obtaining a credit rating report from TransUnion (www.transunion.com), Experian (www.experian.com), or Equifax (www.equifax.com). Ascertain whether all the entries are correct and fair.

The most common causes of a low credit score (600 and below) or a high credit risk rating (R5 or higher) are:
a short credit history: 2 or 3 late payments do not look as bad in a 5-year record as in a 2-year record
total loan payments are more than 40% of your personal disposable income
a record of bankruptcy (records are kept for 10 years)
frequent late payments: an …read more

In addition to the credit score (or FICO score) where a score below 600 will drop you into the subprime category, financial institutions also do a credit risk rating where a borrower is evaluated according to a scale of 1 to 9, the lower scale being the better risk and deserving of lower interest.
To the number is attached a letter modifier: R (revolving as in credit cards) or I (installment as in a house or car loan).
Numbers 1 through 6 indicate the number of months you are habitually in arrears or late in payments, the number 1 declaring that you …read more

Credit Scores generated by the financial institution’s credit rating system range from 300 to 850, where the higher score denotes a better risk. A score below 600 is subprime. Although credit bureaus estimate that more than half of US residents have credit scores higher than 700 and will qualify for normal market rates on their loans, it is nevertheless important to find out how you can fall into the subprime category and be saddled with higher interests and more stringent loan provisions.
A score below 600 can be earned:
…read more