The credit score of a person is the sum of your entire repayment history. This credit score is determined by your debts, loans, missed payments, credit card and number of loans. The highest score is 900 and if your score is 750 and above that you are said to be within the Low Risk bracket. Therefore, higher the credit score lower is the risk involved while disbursing the loan and therefore higher is your eligibility. The credit score changes depending on your spending choices. So explore with us everything about the credit score in this article.
Why is your Credit Score Important?
Some of the reasons why the credit score is very important are that –
- It is one of the factors that would determine whether or not your loan application will be approved. If your credit score is high it simply indicates to the banks that you can be trusted with the loan repayment.
- Having a good score helps you in fetching loans at low rate of interests and therefore low EMI.
- The credit scores and records are permanently saved on the portal and showcase your entire history. So make sure you have a good clean score.
How to improve the credit score?
- Always make sure that you pay your bills on time. There are a number of simple ways to track your payments such as writing sticky notes on the fridge, maintaining a calendar of things to do, put a phone reminder or something but pay your bills on time
- Do not use your credit card to more than the credit limit you can pa back, because small ratios are better for rating.
- Even if you had a debt on you and you paid it out, don’t try to remove or delete that record, because it will be great for the banks to see that you did clear off your debts and didn’t keep it pending and unpaid
- Don’t apply for multiple loans or credit cards all at the same time. Because if it gets declined also it gets recorded and has a risk of lowering your score
- Have your name only for your accounts and not let others use your accounts. Because even though it’s not you the credit company will not know, so you will fall into trouble.
So these are few of the most important things to know about the credit score and why exactly it is such a serious thing. Remember that it is a long process to get the score back to good and so try your maximum best to not come under the risk bracket. If at all you find that your credit score is not that good, you can rectify your credit score by availing an expert help of organisations such as Credit Clear and your score can be improved. Hope this article was helpful for you all.