Everything You Should Know About Credit Score

by Ajay Singh Financial Advisor

What is Credit Score?

Credit score is the measurement of your creditworthiness. It is a three-digit number between 300-900, which is designed to depict the likelihood that you will pay your loan and credit card bills on time. The higher your credit score is, the better you look as a borrower to the lender. So, before applying for a loan be it car loan, personal loan or home loan, you should always check credit score to see the likelihood of getting your loan approved.

Check credit score for free online on Clix Capital. You just need to enter a few details about you like your Pan Card no., name, etc. to get the most accurate credit score within a matter of few minutes.

Monitoring your credit score regularly has various benefits and some of them are as follows-

•       You can always take timely measures to improve your credit score
•           You can guess the probability of getting your loan and credit card     application approved
•           Helps you detect any error in your credit report and you can correct it on time
•          Allows you to keep a tab on your financial identity
•          Helps you known what has led to a low credit score
•          Helps you know the loan and credit card offers available 

A good credit score denotes that you have managed your credit efficiently till now while a poor credit score represents you a risky borrower and you cannot be trusted by the lenders. Usually a credit score above 750 is considered as good and the closer it is to 900 the better you can negotiate with the lenders in terms of interest rates and loan tenures. However, your credit score is not the only factor that banks and financial institutions consider at loan approval. They also look at other factors like loan type, loan amount and type of product (secured or unsecured) to decide whether to sanction your loan or not.

To keep a tab on your latest credit score, you can request your credit report from one of the three top credit bureaus i.e. Equifax, Experian and TransUnion CIBIL or you can register with a credit service provider that offers free credit score check service.

Read Here: Denied Loan Due to Low Credit Score? Here’s what you can do to get next time

What is Good, Fair and Bad Credit Score?

However, the credit bureaus have not given any specific range to decide whether a credit score is good, fair or bad, but the credit score gradation is usually done as follows-

650-700 – Poor

700-750 – Fair

750- 800 – Good

800+ - Excellent

How Can You Boost Your Credit Score?

Your credit score is defined by a complicated algorithm that considers all your finances. Credit bureaus do not reveal their precise formulas, but there are abundance of good ways to work on your credit score by following standard guidelines.

 Usually, you can improve your scores by:

•         Having a mix of different sorts of accounts
•         Maintaining low credit card balances
•          Establishing a long credit history

You must also make prompt payments to all the places you owe money, constantly, to establish a pattern. It implies paying rent on time, paying bills on time, and making least amount repayments to your loans and credit cards on time.

 

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Created on Nov 12th 2020 23:44. Viewed 592 times.

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