{"id":1326,"date":"2019-10-31T15:44:36","date_gmt":"2019-10-31T10:14:36","guid":{"rendered":"https:\/\/homefirstindia.com\/?post_type=article&p=1326"},"modified":"2024-07-02T12:18:14","modified_gmt":"2024-07-02T12:18:14","slug":"credit-score-why-it-matters-and-how-to-improve-it","status":"publish","type":"article","link":"https:\/\/homefirstindia.com\/blog\/article\/credit-score-why-it-matters-and-how-to-improve-it\/","title":{"rendered":"Credit Score: Why it Matters and How to Improve It?"},"content":{"rendered":"

\"Credit
\nYour credit score<\/strong><\/a> is a simple number that tells a complicated story. An enormous piece of your financial history \u2014 from long term debt to a couple of missed payments\u2014 can be summed up by this number. This little figure can significantly affect your life, as it is one of the primary criteria that is considered by banks and finance companies before sanctioning a loan.<\/p>\n

Let’s Keep It Simple:<\/b><\/strong><\/h3>\n

There are five factors that determine how your score is calculated:<\/p>\n

    \n
  1. Payment History:<\/b><\/strong> This is, without any doubt, the most significant factor. It contributes greatly to your credit score and is a factor that various banks use to determine whether you’re going to default on future credit.<\/li>\n
  2. <\/b>Amount Owned:\u00a0<\/b><\/strong>This is the second most significant factor that goes into your credit score. In case you’re continually \u201cmaxing out\u201d your credit cards and “reusing” your accessible credit each month, it demonstrates that you’re struggling to make ends meet. Keep your general credit usage below 30% of the sanctioned limit.<\/li>\n
  3. Length of Credit<\/b><\/strong>: When did you first borrow and how old your credit history plays a role in your credit score.<\/li>\n
  4. New Credit<\/b><\/strong>: When did you most recently borrow? Have you borrowed a lot recently? These factors also impact your credit score. If you have a lot of \u201cinquiries\u201d in your Credit report<\/a>, it perhaps means that you are a \u201ccredit seeker\u201d or someone who is anxious to get credit facilities.<\/li>\n
  5. Kinds of Credit:<\/b><\/strong> The types of loans that you have availed tells the bank something about your credit behavior. Secured loans like home loans or automobile loans are considered \u201cgood credit\u201d. Unsecured loans like personal loans and gold loans indicate a credit-seeking behavior.<\/li>\n<\/ol>\n