Your credit score is likely the first thing the credit issuer looks at when you are applying for a loan
Credit score or CIBIL score has become very important in today’s time, both for entrepreneurs and the working class. Using statistics, one may determine a person’s likelihood of repaying debts by looking at their credit score. Your record is evaluated by a variety of credit bureaus, who then send you the score. Each organization has a unique system for evaluating employees, and the calculation is based on a wide range of variables. India’s first credit information company, CIBIL (Credit Information Bureau Limited), was founded in 2000 and is connected to the US-based TransUnion.
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Your credit score is likely the first thing the credit issuer looks at when you are applying for a loan. You follow the same procedure whether you’re applying for a credit card, loan, or mortgage. Credit reports and credit scores are indicators that let a lender determine your dependability for making on-time debt payments. So, the risk evaluation of the person or asset, in this example, you, is where the credit score is most crucial. If your credit score is on the low side, you need to raise it.
Credit purchases can be used to cover expenses like that loan-required dream business idea, the destination wedding you have been planning for ages, student loans, and other unanticipated costs. Having a high credit score will make it easier for you to be approved for grants. Follow these tips to have a good credit score.
Timely EMI Payments
Defaulting on your Easy Monthly Installments on any loans or purchases is a sure-shot way to lower your credit score. Ensure that all your EMIs are paid on time and there are no outstanding amounts left for a very long time.
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Timely payment of Credit card dues
The same logic applies to paying your credit card dues as well. Make these payments on time and do not default.
Avoid using the full credit card limit
Using a full credit card limit affects your credit score. The Credit Utilization Ratio (CUR) has a great impact on credit scores. Your credit utilization ratio depends on how much you use your credit card. Generally, credit card companies consider a credit utilization ratio above 30 percent as a sign of debt.
Keep checking your credit score regularly
By having regular information about credit score, you will be able to improve it in time. Your credit score can draw your attention to whether you have any other loans outstanding and whether you made any mistakes when it came to repaying previous loans.
