# data[].attributes.body
By: Christian Clauser

# data[].attributes.body
Credit analysis, in short, is to see if a person, organization or business is creditworthy. 'Credit Worthiness systems' have been devolved by several business to establish an individual or companies credit rating. These systems work by using various information, such as: Credit or Payment history, which counts towards 35% of the analysis and smaller information like: age, income, financial obligations, employment status, total debt owed, types of accounts and ability to repay debt. When the information listed above is provided then the system provides a credit score from 550 & below to 750 & above, 750 being excellent and 550 being bad. In end these scores are then used to create an appropriate interest for the business or person. In this Padlet, I will be further explaining credit analysis through videos, websites and images. I will also explain the various ways credit analysis is proceeded in depth.

# data[].attributes.body
In this video it explains how credit scores are calculated, a.k.a 'credit analysis'. The presentation in the video goes into to depth of explanation to what each section means and gives very good examples of what credit bureaus are looking at. Although the video is talking about the United States, the same process applies to Canada and is not different.

# data[].attributes.attachment_link.description
Video explains how your credit score is calculated and what affects your credit score to increase or decrease.

# data[].attributes.body
This picture shows the difference in scores from poor to excellent. I chose this picture because it shows the Canadian average credit score.

# data[].attributes.body
This website is to show some history on credit ratings/ analysis and how it was created. It also explains the differences of the times before us and how credit was not a huge factor in life, unlike how it is now. Overall, I thought this website would be nice to show people how far we have come in life and how we do not have to have near perfect credit history to get loans.

# data[].attributes.attachment_link.readable_text
Credit ratings provide individual and institutional investors with information that assists them in determining whether issuers of debt obligations and fixed-income securities will be able to meet their obligations with respect to those securities. Credit rating agencies provide investors with objective analyses and independent assessments of companies and countries that issue such securities. Globalization in the investment market, coupled with diversification in the types and quantities of securities issued, presents a challenge to institutional and individual investors who must analyze risks associated with both foreign and domestic investments. Historical information and discussion of three companies will facilitate a greater understanding of the function and evolution of credit rating agencies.

John Knowles Fitch founded the Fitch Publishing Company in 1913. Fitch published financial statistics for use in the investment industry via "The Fitch Stock and Bond Manual" and "The Fitch Bond Book." In 1924, Fitch introduced the AAA through D rating system that has become the basis for ratings throughout the industry. With plans to become a full-service global rating agency, in the late 1990s Fitch merged with IBCA of London, subsidiary of Fimalac, S.A., a French holding company. Fitch also acquired market competitors Thomson BankWatch and Duff & Phelps Credit Ratings Co. Beginning in 2004, Fitch began to develop operating subsidiaries specializing in enterprise risk management, data services and finance industry training with the acquisition of Canadian company, Algorithmics, and the creation of Fitch Solutions and Fitch Training. (For information bond ratings systems see Bond Ratings Agencies: Can You Trust Them.)

John Moody and Company first published Moody's Investors Service
"Moody's Manual" in 1900. The manual published basic statistics and general information about stocks and bonds of various industries. From 1903 until the stock market crash of 1907, "Moody's Manual" was a national publication. In 1909 Moody began publishing "Moody's Analyses of Railroad Investments", which added analytical information about the value of securities. Expanding this idea led to the 1914 creation of Moody's Investors Service, which, in the following 10 years, would provide ratings for nearly all of the government bond markets at the time. By the 1970s Moody's began rating commercial paper and bank deposits, becoming the full-scale rating agency that it is today.

Henry Varnum Poor first published the "History of Railroads and Canals in the United States" in 1860, the forerunner of securities analysis and reporting to be developed over the next century. Standard Statistics formed in 1906, which published corporate bond, sovereign debt and municipal bond ratings. Standard Statistics merged with Poor's Publishing in 1941 to form Standard and Poor's Corporation, which was acquired by The McGraw-Hill Companies, Inc. in 1966. Standard and Poor's has become best known by indexes such as the S&P 500, a stock market index that is both a tool for investor analysis and decision making, and a U.S. economic indicator. (See A Trip through Index History to learn more about Standard & Poor's Indexes.)

Beginning in 1970, the credit ratings industry began to adopt some important changes and innovations. Previously, investors subscribed to publications from each of the ratings agencies and issuers paid no fees for performance of research and analyses that were a normal part of development of published credit ratings. As an industry, credit ratings agencies began to recognize that objective credit ratings significantly increased in value to issuers in terms of facilitating market and capital access by increasing a securities Nationally Recognized Statistical Rating Organizations (NRSRO)
issuer's value in the market place, and decreasing the costs of obtaining capital. Expansion and complexity in the capital markets coupled with an increasing demand for statistical and analytical services led to the industry wide decision to charge issuers of securities fees for ratings services.

In 1975, financial institutions, such as commercial banks and securities broker-dealers, sought to soften the capital and liquidity requirements passed down by the Securities and Exchange Commission (SEC). As a result, nationally-recognized statistical ratings organizations (NRSRO) were created. Financial institutions could satisfy their capital requirements by investing in securities that received favorable ratings by one or more of the NRSROs. This allowance is the result of registration requirements coupled with greater regulation and oversight of the credit ratings industry by the SEC. The increased demand for ratings services by investors and securities issuers combined with increased regulatory oversight has led to growth and expansion in the credit ratings industry.

Countries are issued An Overview of Credit Ratings
sovereign credit ratings. This rating analyzes the general creditworthiness of a country or foreign government. Sovereign credit ratings take into account the overall economic conditions of a country including the volume of foreign, public and private investment, capital market transparency and foreign currency reserves. Sovereign ratings also assess political conditions such as overall political stability and the level of economic stability a country will maintain during times of political transition. Institutional investors rely on sovereign ratings to qualify and quantify the general investment atmosphere of a particular country. The sovereign rating is often the prerequisite information institutional investors use to determine if they will further consider specific companies, industries and classes of securities issued in a specific country.

Credit ratings, debt ratings or bond ratings are issued to individual companies and to specific classes of individual securities such as preferred stock, corporate bonds and various classes of government bonds. Ratings can be assigned separately to short-term and long-term obligations. Long-term ratings analyze and assess a company's ability to meet it's responsibilities with respect to all of its securities issued. Short-term ratings focus on the specific securities' ability to perform given the company's current financial condition and general industry performance conditions. (For more information see What Is A Corporate Credit Rating?)

CInvestors may utilize information from a single agency or from multiple rating agencies. Investors expect credit rating agencies to provide objective information based on sound analytical methods and accurate statistical measurements. Investors also expect issuers of securities to comply with rules and regulations set forth by governing bodies, in the same respect that credit rating agencies comply with reporting procedures developed by securities industry governing agencies. Understanding the history and evolution of ratings agencies gives investors insight on the methodology that agencies use, as well as the quality of ratings from each agency. The analyses and assessments provided by various credit rating agencies provide investors with information and insight that facilitates their ability to examine and understand the risks and opportunities associated with various investment environments. With this insight, investors can make informed decisions as to the countries, industries and classes of securities in which they choose to invest.

For additional reading, check out Why Bad Bonds Get Good Ratings and The Debt Ratings Debate.

# data[].attributes.attachment_link.title
A Brief History Of Credit Rating Agencies

# data[].attributes.attachment_link.description
Credit ratings provide individual and institutional investors with information that assists them in determining whether issuers of debt obligations and fixed-income securities will be able to meet their obligations with respect to those securities. Credit rating agencies provide investors with objective analyses and independent assessments of companies and countries that issue such securities.

# data[].attributes.body
In this video a person explains the importance of having credit. She uses personal experiences to back her points up and is able to explain that in Canada to own anything you need credit. The presenter also talks about how credit analysis is different for different banks and loaning companies, but are relatively similar and it is more about personal preference. This video relates to people on a personal level and is nice to hear from someone that has had their own experiences instead of hearing someone educate on something they are being told to do.

# data[].attributes.attachment_link.title
Life In Canada | Why Do You Need A Credit Card In Canada

# data[].attributes.attachment_link.description
In this video we are talking about why do you need to have a credit card in Canada and how you can use it wisely to build your credit history and credit score. SUBSCRIBE FOR MORE VIDEOS https://www.youtube.com/channel/UCGbtVlo0NpJEflS1_OPiEtQ USEFUL LINKS: How can I get a credit card with no Canadian credit history?

# data[].attributes.body
This picture symbolizes my topic, credit analysis. Remember to always look into to your credit and improve it if there are existing issues.

# data[].attributes.body
This website is an actual government website of Canada that focuses on many things including credit analysis and ratings. In this portion of the website I chose the section that explains about what to do to help increase credit ratings. It gives many examples of what goes into a credit analysis and explains how to benefit from these examples. With so many people suffering from having bad credit it's nice to know that our government is trying to help.

# data[].attributes.attachment_link.readable_text
Monitoring your payment history

Your payment history is the most important factor for your credit score.

To improve your payment history:

always make your payments on time

make at least the minimum payment if you can't pay the full amount that you owe

contact your lender right away if you think you'll have trouble paying a bill

don't skip a payment even if a bill is in dispute

Get electronic alerts from your financial institution

Your financial institution may send you an electronic alert when the credit available on your credit card falls below a certain amount.

These alerts may help you manage your day-to-day finances, such as your credit payments.

Learn more about these electronic alerts.

Using credit wisely

Don't go over your credit limit. If you have a credit card with a $5,000 limit, try not to go over that limit. Borrowing more than the authorized limit on a credit card may lower your credit score.

Try to use less than 30% of your available credit. It's better to have a higher credit limit and use less of it each month.

For example, suppose you have a credit card with a $5,000 limit and an average borrowing amount of $1,000. Your credit usage rate would be 20%.

If you use a lot of your available credit, lenders see you as a greater risk. This is true even if you pay your balance in full by the due date.

Improving your credit history

The longer you have a credit account open and in use, the better it is for your score. Your credit score may be lower if you have credit accounts that are relatively new.

If you transfer an older account to a new account, credit bureaus consider the new account as new credit.

For example, some credit card offers come with a low introductory interest rate for balance transfers. The new card on which you transfer your current balance is considered a new credit product.

Consider keeping an older account open even if you don't need it. Use it from time to time to keep it active. Check your credit agreement to make sure there is no fee if you keep the account open.

Limiting your number of credit applications or credit checks

Credit inquiries, also known as credit checks, count toward your credit score. It's normal and expected that you'll apply for credit from time to time. When lenders and others ask a credit bureau for your credit report, they record it as an inquiry.

If there are too many credit checks on your credit report, lenders may think that you're:

urgently seeking credit

trying to live beyond your means

To control the number of credit checks on your report:

limit the number of times you apply for credit

get your quotes from different lenders within a 2-week period when shopping around for a car loan or a mortgage. Credit bureaus will combine and treat your inquiries as a single inquiry for your credit score

apply for credit only when you really need it

"Hard hits" versus "soft hits"

"Hard hits" are credit checks that appear on your credit report and count toward your credit score. Anyone who views your credit report will see these inquiries.

Examples of hard hits include:

credit card applications

some rental applications

some employment applications

"Soft hits" are credit checks that appear on your credit report. They're recorded on your credit report but only you can see them. These credit checks don't affect your credit score.

Examples of soft hits include:

requesting your own credit report

businesses checking your credit report to update their records about an existing account you have with them

Diversifying your credit

Your score may be lower if you only have one type of credit product, such as a credit card.

It's better to have a mix of different types of credit, such as:

A mix of credit products may improve your credit score. Make sure you're able to pay back any money you borrow. Otherwise, you might end up hurting your score by taking on too much debt.

Related links

# data[].attributes.attachment_link.keywords[]
credit score; credit check; improving credit score; credit score check; how to build credit; how to improve your credit score; how to increase your credit score; how to raise credit score; how to increase my credit score; how to improve my credit score; how to build your credit score; how can i increase my credit score; how to get a better credit score; how to build a good credit score

# data[].attributes.attachment_link.description
What affects your credit score and how to improve it.

# data[].attributes.body
To me this picture symbolizes that you may have bad credit but there is always a way to improve it. Don't give up on improving credit because eventually you'll need it.

# data[].attributes.body
In this video it explains the importance of credit scores and touches on some important reasons why a persons credit score may be low or high. One point that really stood out to me would be the fact that having more than one open credit loan (credit card, loan,etc.) has negative affects on your credit analysis and overall credit score.

# data[].attributes.attachment_link.description
Credit scores fall in a range of 300-800 with the lower the score, the less the person's credit worthiness. Each person who uses banking or services from a financial service company receives a credit score. To establish a good credit score, you've gotta pay your bills on time and gradually get more available credit by applying for another card from a company or a retailer.

# data[].attributes.body
This website is an actual credit bureau and I chose this website because it allows you to do a multiple amount of things. These things include, checking your credit, tips to improve credit, what goes into a credit analysis and how to avoid being bad credit. Also, this website is Canadian and is very easily accessible and detailed for a person to learn about credit analysis.

# data[].attributes.attachment_link.title
What Affects My Credit Score? | TransUnion

# data[].attributes.attachment_link.description
What are the biggest factors that can affect my credit score? Paying bills on time is one of the best ways to keep up good credit health; it shows lenders and creditors that you're reliable and will pay back your debts.