What is credit rating for individuals ?

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I have heard people from USA and CANADA talking about credit rating. They are more worried about their credit rating as they say it is difficult to get loan for car and house with bad credit rating. In india we don't have such credit rating system and i don't have knowledge about it. Can anyone please explain me what is ... (1) Credit rating and who gaves this rating (2) What are advantages and dis-advantages of it. (3) How can a person improve his rating I believe knowledge must be shared.... so please clear this concept to me. thanks