Starting from the beginning, a credit score is a three digit numerical figure which is derived from your data-rick credit report. It is a critical factor for lenders to determine your creditworthiness for a loan, credit card or any other credit.
Credit score ranges from 0 to 999 for all the bureaus. The major three credit bureaus in India are CIBIL, Equifax and Experian. The banks and financial provide the information to these bureaus and these bureaus based on the data provided by the banks and financial institutions provide the credit report to them. Basically credit score is a snapshot of the credit report of that individual.
Talking about a good credit score, a score more than 750 is considered to be a good credit score. Individual having a good credit score find it really easy to get approval for loans and credit card. While people with credit score less than 750 struggle to get approval for loans and credit cards instantly.
Below are some questions that are important to know about credit score:
How is credit scores generated?
Credit score are generated based on the factors such as payments histories, debt level, types of credit and length of credit accounts which are pulled out for their credit report. These factors will determine if the consumers will pay their dues on time or not. So, a credit score summarizes the information in your credit report, which makes it easier and faster for a lender to process a loan application and make a determination.
Benefits of good credit score?
A good credit score will help you to take credit for a car or a home or get a credit card at a comparatively lower rate of interest. This means that you will have to pay less money towards interest.
Ultimately having a good credit score will only benefit you and having a poor credit score will only damage your credit profile.