Credit Score Check: Key Factors That Determine Your Credit Card
A credit score is basically a three digit number that is assigned to an individual on a scale of 300 to 900 points. Any score over 750 is considered good.
So, if someone has a good credit score, they can benefit from the best rates in the market.
As more and more people tend to rely on loans and EMIs, a borrower’s credit rating becomes absolutely crucial. It offers an overview of its financial health and allows the borrower the best interest rates on the market.
A credit score is basically a three digit number that is assigned to an individual on a scale of 300 to 900 points. Any score over 750 is considered good. It should be remembered that the credit score is also directly related to the interest rate.
So, if someone has a good credit rating, they can get a loan at the best rates in the market. However, if the credit score is not up to par, the borrower will not get a loan.
The most important factor when calculating credit score is payment history. You must ensure that no payment is delayed or missed. A missed or delayed payment can hurt your credit score.
USE OF CREDIT
Credit usage refers to an individual’s use of the credit limit. Ideally, one should avoid using more than 30% of the available credit limit.
There needs to be a “mix” of credit as this emphasizes the ability to manage different types of credit products.
A credit history shows how long you have been using a credit product. A long credit history indicates one’s ability to manage credit for longer.
Too many new applications can lead lenders to think the borrower is facing cash flow management issues.
Other factors specific to his profile can also have an impact on the credit rating. One of these factors is the total amount one owes for the various credit products one uses.
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