Credit Rating

Your credit rating is a number that tells financial institutions how reliable a borrower you are — and it directly affects the interest rate you will be offered on a mortgage or a loan. This guide explains how it works and how to improve it.

Disclosure: Educational information only. Any action you take is your own responsibility.

What a credit rating is

A credit rating, or credit score, is a score based on your credit data: loan history, repayments, credit facilities and arrears, all held in the Bank of Israel's credit data system. The score reflects your risk level as a borrower. For more see credit data.

Why it matters to your pocket

The rating directly affects two things: whether you are approved for credit, whether a mortgage, a loan or a card, and at what interest rate.

A high rating means a lower rate, which means saving thousands of shekels across the life of a loan. A low rating means difficulty obtaining credit and a higher rate when you do. On a mortgage, even a small difference in rate is worth a great deal. See mortgage.

What affects the rating

Meeting payments — by far the most significant factor. Repaying on time builds a good rating.

Arrears, bounced cheques and debts damage it.

Credit utilisation — chronically using the full extent of your facility signals risk, even when you never miss a payment.

History — responsible conduct sustained over time is what actually builds a rating.

How to check your rating

This is your right: you are entitled to receive a credit data report about yourself, generally once a year free of charge.

It is worth checking, both to confirm there are no errors that could be harming you, and to understand how you appear to financial institutions. Where there is an error, you can request a correction.

How to improve a credit rating

1. Pay everything on time — loan repayments, cards and bills.

2. Avoid arrears and bounced cheques.

3. Do not run your credit to the limit continuously.

4. Check and correct errors in the report.

5. Build history — patience and consistent conduct.

Common mistakes

1. Never checking the report — errors damage you silently.

2. Dismissing a "small" delay — even a minor late payment is recorded.

3. Chronically maxed credit — it signals risk regardless of repayment record.

Summary

Your credit rating is a financial asset that affects every interest rate you will be offered. Check the report, correct errors, and pay on time — the benefit comes back to you as a lower rate. See credit data and the banking and credit section. We provide the knowledge — the decisions remain yours.