Merits and drawbacks of credit rating

Question

Write down the merits and drawbacks of credit rating?

Answer 1

The merits and drawbacks of credit rating are illustrated below:-

i) People with superior credit will have their capability enhanced for the borrowing. Lenders will be capable to rewarded or punished by the people with their reports on the practices of their credit responsibility

ii) The drawbacks can take place when the credit information that is been reported or when the characteristics of the consumer's is stolen. It is actually hard for the lenders to get the information if it is lost or it is very hard and strenuous process.