Credit Score
Credit cards basically let the cardholder to purchase goods and services by borrowing money from the bank or any other financial organization. But you also have to return that used money to them with some interest within the prescribed time. Basically, it is the measure of you seriousness of paying back your debts to the bank. If you return you debts on time you will have a good credit score otherwise it will bad. And it plays a very important role while taking loans.
•Good credit score – 680 to 900
•Average credit score – 620 to 679
•Low credit score – 580 to 619
•Poor credit score – 500 to 579.
What does a credit score measure
Your credit score is a number that represents the risk a lender takes when you borrow money. A FICO score is a well-known measure created by the Fair Isaac Corporation and used by credit agencies to indicate a borrower’s risk.
What Actually It Means
A credit score is actually an expression with the help of which we analyze of customers credit files, or basically, it measures worth of credits of customers. Credit cards are also used by lenders to check to eligibility of the customer and his revenue.
How Credit Score or CIBIL Is Calculated
Basic factors on which credit score depends
•35% payment history
•30% amount owed
•15% length of history
•10% new credit
•10% types of credit used.
Payment history: It is the most important factor which shows whether you give your payments on time or not.
What Is a Cibil Score?
CIBIL score is a three-digit number starts from 300 to 900, used by banks and NBFCs to find out your credit history and ability to pay back your loan on time.
What Should Be The Minimum CIBIL Score Be Eligible For The Bank Loan
Usually, 750 is the minimum cibil for the eligibility of personal loan. Generally, it starts from 300-900. 300 is minimum and 900 is maximum.
Checking Cibil Score, Again And Again, Is Good or Bad
Checking credit score does not impact your credit but it is not safe every time but it affects your credit score. Every time you check your credit score your cibil get decreased by two points. Sometimes one additional credit inquiry will take less than five points off their FICO Scores. For perspective, the full range for FICO Scores is 300-850. Inquiries can affect largely your credit score if you have a few accounts or a short credit history.
How One Should Increase Their Credit Score
- You should keep your credit balance as low as possible.
- Furthermore, you should pay off your debts on time.
- Besides that, you should not close unused credit cards as short-term planning to raise your scores
- Do not use more than one credit card to increase your credit card.