Credit Score: It is well known that credit score plays the most important role in getting loans. Those who have a bad credit score, find it difficult to get a loan. But there are still some points related to credit scores that are not as widely known. For example, on what basis credit scores are calculated, or what is the credit utilization ratio. Today we will tell you about some similar things related to credit scores.
- Firstly, know that the credit score varies from 300 to 900.
- Usually, having more than 750 credit scores is considered good.
- Those who have a higher credit score can avail loans easily.
Credit Bureaus keeps every record
- The credit score of the customers is decided by many credit bureaus.
- Major credit bureaus include Trans Union Cibil Experian, CRIF High Mark, and Equifax.
- These credit bureaus keep a record of your monthly bill and loan installment payments.
- They calculate your credit score on the basis of few years of record.
Credit Utilization Ratio
- Credit Utilization Ratio (CUR) is how much of the credit limit of your credit card you use in a month.
- The CUR has a great impact on the credit score. Your CUR depends on how much you use your credit card.
- The more you use your credit card, the higher will be your CUR.
Having an old credit card considered beneficial
- Having a long-standing loan or using a credit card for many years is considered good in terms of credit score.
- In fact, this shows that you make the right use of the loan. You pay installments on time.
Don’t apply repeatedly
- Do not apply repeatedly for a loan or credit card. This is not considered good in terms of credit score. This reduces credit scores.
Make loan payment at right time
- You should pay the EMI of the loan regularly and not miss it.
- Once you make a late payment or default, it can reduce the credit score by up to 100 points.