7/5/2023 0 Comments Free credit score![]() ![]() However, credit mix has a low impact on your credit score and it’s unlikely that a lender will reject you just because you do not have an optimum mix of credit products. Also, if you have taken too many unsecured loans like personal loans, it shows you are credit hungry and are too dependent on credit. Even though having CUR in the range of 60-70% barely has an impact on credit score but having a high credit utilization ratio or maxing out your credit limit frequently indicates a higher dependency on credit and a potentially high repayment burden, which may negatively impact your credit score.Ĭredit Mix: If you have taken different kinds of loans like personal loan, auto loan, home loan and have responsibly paid it back, it shows your ability to handle different kinds of credit. You should try to refrain from utilising more than 30% of your available credit on a regular basis to have a good credit utilization ratio. Multiple hard enquiries at the same time may have a considerable short-term impact on your credit score.Ĭredit Utilization Ratio: The ratio of the credit amount you spend to the credit amount available to you is known as the credit utilization ratio. Too many hard inquiries may negatively affect your credit score as it shows you to be credit hungry. Such inquiries by lenders and financial institutions are known as hard inquiries. Number of Hard Inquiries: Every time you apply for a new credit product, the lender makes an inquiry about your credit score. It has a medium impact on your credit score. If you have used credit cards/loans for a long period of time and made timely payments on them, then it's a sign of disciplined credit behaviour. Your loan repayment history has a high impact on your CIBIL score calculation.ĭuration of Credit History: The duration or age of your credit history also affects your credit score. Defaulting on your EMIs or making late payments negatively affects your CIBIL score. Loan Repayment History: Timely payments can boost up your credit score and help in improving it significantly. Some of the key factors that influence your credit score are: These factors depict your credit behaviour in the past and are reported to Banks and NBFCs every time you apply for a credit product. Your credit score depends on a lot of factors that a credit bureau takes into consideration while calculating your CIBIL score. Please note that checking your credit report once or multiple times does not have any impact on your score and it takes just a few minutes. We have a partnership with all 4 leading credit bureaus, including CIBIL, that enables you to check, track and build your credit score – At absolutely zero cost. Each credit bureau has its own model or algorithm for calculating your credit score hence, your score from each bureau is likely to vary.Īt, you can check your credit report online for FREE, along with monthly updates. Each credit bureau calculates your credit score independently on the basis of your credit information that is provided to them by banks/NBFCs on a regular basis. While CIBIL is the oldest, there are three other credit bureaus in India that offer you with your credit report - Experian, CRIF High Mark and Equifax. TransUnion CIBIL Limited (Formerly known as Credit Information Bureau (India) Limited) is a credit bureau that maintains and calculates your CIBIL score. ![]() On the other hand, if you been disciplined with the repayments of your EMIs and credit card bills, and have not displayed any credit hungry behaviour by frequently applying for credit, your credit score is likely to be good. ![]() If you often miss paying the EMIs of your loans or your credit card bills on time, your score is likely to be negatively impacted. For few banks, even the credit score of 700+ is also considered for credit card approvals. Usually, a credit score of 750 and above is considered a standard benchmark and preferred by lenders for any kind of loan or a credit card. The higher your credit score, the more likely lenders are to approve you for new credit. Your credit score is calculated out of 900. When you apply for any kind of loan or a credit card, the lender bank or NBFC takes a close look at your credit report and credit history that is maintained in your credit report. Simply put, your credit score shows lenders whether you are a reliable borrower or a risky one, and the likelihood of you repaying a new loan responsibly. Credit score, also commonly referred to as CIBIL Score is primarily a measure of your ability to borrow, calculated and generated on the basis of the credit information provided by the lenders on monthly basis. Credit Score is a 3-digit numeric summary of your credit history that represents your past credit behaviour that how well you have managed your credit products, like a home loan, business loan, auto loan, personal loan or your credit cards. ![]()
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