Want to know how your credit score is calculated?
Fri Mar 29 2019 / By: Nupur SharmaYour credit score usually relies on several factors like the credit office, the score data and the method used to calculate the score by the credit office. Three major credit offices in India are located – Experian, Equifax, and TransUnion (or CIBIL).
Nevertheless, you should note that the results of these credit offices may vary depending on the information provided to these three offices by the different creditors and banks. Several key factors determine how your credit score is calculated.
• The number of active accounts you have (such as credit accounts and other EMI accounts).
• The type of accounts you own.
• The ratio of credit and debit.
• Credit history
• Payment history
Once more, it is important to remember that each of these factors is different in weight / effect on your credit score depending on the model score used by the credit bureau. Let's go into the details and explain what it's all about.
Credit Options
The calculation of your credit score is based on your credit charges. This includes your credit card summary and your loan accounts. Thus, if you pay EMIs for any loan, including personal loans, car loans and home loans, the details will affect your credit value and play a major part in calculating it. If a credit card is provided, this is included in the calculation as well.
Used Vs Available Credit
It's just your credit limit and how much you have used it. It is your credit use ratio and experts believe that more than 30 percent of your credit limit should never be used. Often lenders and creditors regard this information as a key proof of your cost-effectiveness.
Payment History
There's a lot about you in your payment history. This information is essential for all creditors, who may be worried that you will reimburse the debt. So it is absolutely important that your payment history on your EMIs on the various credits or cards.
If you've ever missed the payment, missed a deadline or failed, your payment history will show the prospective lender. During the calculation of your credit, offices will consider how long your payments have been delayed and how often they have been late or owed.
Credit History
Your credit history is nothing more than an indicator of how long the payment history has been kept. Disturbed? Don't be. Basically, your credit history is information on all your credit cards and every credit account which you opened many months ago.
Would you like to improve your loan history? Be careful about your expenses and prioritize your reimbursements. You can check your credit score by clicking on the button below if you want to check it.