There are a variety of ways to use credit evaluation results, depending on your individual goals and circumstances. Some common uses include:
- Investment decision
The results of a company’s credit evaluation can help understand the financial status, management situation, and growth potential of the company for potential investment and you evaluate investment risks.
In addition, referring to the issuer’s credit evaluation results can help make investment decision in bonds. The higher the credit rating, the lower the risk of bond default and, therefore, a safer investment.
- Selection of business partners
When considering a transaction with a company, the credit evaluation results of the company can help determine its financial soundness and credit management ability and evaluate transaction risks.
In particular, when providing loans or entering into long-term contracts, credit evaluation results can be an important decision-making indicator.
- Credit management
The results of one’s personal credit evaluation can help understand one’s financial situation and credit worthiness, and identify methods of improvement.
Paying off debt, managing credit card usage, and increasing savings can improve a low credit rating.
In addition, prudent management of finances help maintain a high credit rating.
- Others
Credit evaluation results can be used in a variety of situations, such as applying for a loan, purchasing insurance, or concluding a rental contract.
A high credit rating can help access low-interest loans or financial products with favorable terms.