Everything You Should Know About Credit Score
by Ajay Singh Financial AdvisorWhat 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 464 times.