Instead of selling loans with fixed interest rates, they offer tailored rates based on your credit rating. |
Freehold property helps to strengthen a balance sheet that may in turn support a better credit rating and lower the cost of borrowing. |
The lower the credit rating, it is believed, the higher the chances are for a country to default on its sovereign debt obligations. |
But in other countries, you may need to build up a credit rating from scratch or there may be problems with exchange controls. |
Some lenders may view one or two missed repayments relatively benignly and your credit rating may be largely unaffected. |
If the issuer has a bad credit rating, bond traders demand higher yields to compensate for the extra risk. |