What Determines My Credit Score?
To keep it short and simple, your entire financial history! The number of accounts you have, your credit history, your payment history, the inquiries you make, etc. Everything you do in the financial sphere using your PAN impacts your Credit Score.
Let me tell you something amusing: to build your credit score, you must take credit, you must open a variety of accounts, and you must be active in the money market. A person with no loans or credit cards will end up with no credit score.
How is My Credit Score Measured?
Not using a beam-balance, for sure! I'm just kidding. It is a complicated fact-based mathematical model - an algorithm to be precise - which evaluates your financial history and comes up with the score. You cannot possibly calculate it on your own. Why don't you try mymoneykarma's excellent Intelligence Finance Tool? It not only calculates your credit score but also guides you in managing your finances.
Are you still confused? Put yourself at ease, as we are here to provide you with the necessary information to help you maintain a good credit score.
Let us now quickly glance through the factors that typically impact your credit score.
High-Impact Factors
Credit card utilization: How much should you borrow through your credit cards? Experts recommend that you shouldn't exceed 30% of your available credit limit. A low rate of credit utilization indicates that you spend responsibly. It also suggests that you are more likely to repay the loan on time. Additionally, keeping a substantial buffer on your credit limit also helps you in times of crisis or financial emergencies.
Medium-Impact Factors
Age of credit history: This doesn't refer to your actual age. Rather, it shows how long you have been managing credit. You will be considered more worthy of getting credit if you can prove that you have been maintaining your credits responsibly for a longer period. To sum it up, avoid closing your oldest credit card account, as it might drastically bring down your credit score.
Low-Impact Factors
Total accounts: This doesn't just refer to your savings accounts. It includes the number of credit cards, loans, or mortgages that you have. A variety of accounts is always preferable, as it shows that you have been trusted with credit by other lenders.
To keep it short and simple, your entire financial history! The number of accounts you have, your credit history, your payment history, the inquiries you make, etc. Everything you do in the financial sphere using your PAN impacts your Credit Score.
Let me tell you something amusing: to build your credit score, you must take credit, you must open a variety of accounts, and you must be active in the money market. A person with no loans or credit cards will end up with no credit score.
How is My Credit Score Measured?
Not using a beam-balance, for sure! I'm just kidding. It is a complicated fact-based mathematical model - an algorithm to be precise - which evaluates your financial history and comes up with the score. You cannot possibly calculate it on your own. Why don't you try mymoneykarma's excellent Intelligence Finance Tool? It not only calculates your credit score but also guides you in managing your finances.
Are you still confused? Put yourself at ease, as we are here to provide you with the necessary information to help you maintain a good credit score.
Let us now quickly glance through the factors that typically impact your credit score.
High-Impact Factors
Credit card utilization: How much should you borrow through your credit cards? Experts recommend that you shouldn't exceed 30% of your available credit limit. A low rate of credit utilization indicates that you spend responsibly. It also suggests that you are more likely to repay the loan on time. Additionally, keeping a substantial buffer on your credit limit also helps you in times of crisis or financial emergencies.
Medium-Impact Factors
Age of credit history: This doesn't refer to your actual age. Rather, it shows how long you have been managing credit. You will be considered more worthy of getting credit if you can prove that you have been maintaining your credits responsibly for a longer period. To sum it up, avoid closing your oldest credit card account, as it might drastically bring down your credit score.
Low-Impact Factors
Total accounts: This doesn't just refer to your savings accounts. It includes the number of credit cards, loans, or mortgages that you have. A variety of accounts is always preferable, as it shows that you have been trusted with credit by other lenders.
