Looking for a loan or a credit card? In that case it is essential for you to know about credit score & how it works. It is the analysis of your credit history and repayment behavior to release a 3 digit number ranging between 300 and 900. This number is your credit score and is an important factor to determine your ability to apply for a credit facility from a bank or a financial institution.
The credit score is calculated after considering 36 months of credit history. An algorithm is used to compare and consider data points around credit trends and depth of credit. There are four main factors contributing to your credit score:
These points are crucial to determine your future loan or credit card application. Now a days there are multiple websites where you can check your credit score free of any charges.
It is always suggested to maintain a score range of 700 to 900. The more your score is towards the 900 mark the better are your chances to access a hassle free loan in the future. A customer with high credit score is considered to be a responsible borrower.
It is essential to inculcate good practices to build a good credit score. There are some tried and tested steps which can help you to achieve that.
Note: If you maintain a good credit score, it will be easy for you to apply for a smooth loan or credit application when needed.
The advantages are many and you should always consider to work towards a good credit score.
Be conscious while you deal with a loan or a credit facility. If you are upfront and take calculated measures, it will be easy for you to look for better credit/loan features in the future and will also keep your credit score in a handsome shape.
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