What do you know about Credit Score?
Posted on: 25/Nov/2017 4:36:19 PM
What is your knowledge about Credit Score? Do you know how it is calculated, its value, and what sort of effects it has when your score is poor? To all your questions about Credit Score, here we have articulated the answers. Check out
What is Credit Score?
Credit score is a 3-digit numeric summary with all details of history of your credit card. This is sourced from the Credit Information Report. Usually, this score will fall anywhere between 300 and 900. When the score is high, it means the borrower is less risky, and there will be high chances of getting loan approval.
How do we calculate Credit Score?
CICs calculate the Credit Score based on proprietary logic. The number of credit facilities you have availed and their types, total duration of credit history, debt due, history of repayment, default payment, etc. are some of the factors based on which your Credit Score will get affected.
Why should we consider Credit Score as important?
While applying for loan or credit card from any bank or financial institution, your credit score will be cross checked to know whether you are eligible for the loan or not. With this, the lender obtains a clear first impression. The higher the score, the higher will be the chance of approval for loan or credit card approval. When your credit score is very low, it means you belong to a risky zone and you will find it tough to get your loan approved.
What kind of reports are sent by the lending institutions to the Credit Bureaus?
The lending institutions share information about credit facilities to credit bureaus at regular time intervals. Details including name of the lender, type of credit availed (mortgage, personal loan, auto loan, etc.), information of their account, ownership details, dates on which credits were availed, history of payment, total loan amount, balance in the account, records of monthly payment, etc. are included in the report. This is mandatory, as per regulations.
What in case of discrepancies in CIR?
In any case of discrepancy, the customer may seek the credit bureau or credit institution or banking institution from whom the credit facility is got.
In your financial journey, the Credit Score plays a very prominent role. When you make responsible use of your credit with on-time payment, and proper loan numbers and credit cards, you are sure to get proper credit score and enjoy a very smooth financial journey.
