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Are you planning to take a loan? Do you know the first thing that a lender checks when applying for a loan? Do you wish your loans to get approved and processed without delay? Do you want a loan with a lower rate of interest? Well, all of your questions will resolve by a single term, commonly known as a credit score. Not familiar with this term? Let’s have a look at what and why is it essential?

What is a credit score?

A credit score represents the creditworthiness of an individual. The higher the score, the better a borrower seems to be for a potential lender. A credit score is a three-digit number that shows whether you can repay the borrowed amount on time or not. It is the first thing that loan providers check for a loan or a credit card. Hence, it is crucial to have a good credit score. To maintain a good credit score,

• One must pay the payments on or before the given time.
• Check credit reports frequently.
• Maintain a balance between your income, expenses, and debt.
• Pay off existing debts on your credit card.
• Keep utilization lower than 30%.

How to calculate a credit score?

Credit rating agencies have their credit scoring model, which they use to gather data and frame your credit score. The scores may differ, but the factors that each bureau takes into consideration are the same likewise;

• Payment History: 35%
• Credit Utilization: 30%
• Credit History Length: 15%
• Credit Mix: 10%
• New Credit: 10%

A credit score can help you uncover the following:

A credit card not only helps you enrich your financial health- but also gives an outline of your credit health.

• You can identify your credit status.

With a generated score report, you can figure out where you stand, what you need to focus on, and keep track of your previous transactions. You must check your credit card reports frequently to avoid any differences.

• You are eligible for more offers.

A good credit score enables you to get the best offers on credit cards and loans. An ideal credit score that avails you of the best offers should be beyond 750.

What are the perks of having a good credit score?

A good Credit score affirms that you get benefits over those having no Credit score or having a lower score. You are entitled to the following benefits if you retain a good Credit score:

• Higher chances of approval
• Higher loan eligibility
• Access to the best rewarding credit cards
• Lower rate of interests
• Get approved for a higher credit limit
• Pre-approved loans

The majority of financial institutions use your credit history and score as one of the factors to identify whether to lend you any money, how much, and at what rate of interest.Maintaining a good credit score helps you avail of loans and credit cards with better terms and conditions. Want a higher credit score? Our experts can help you get the best credit score! We suggest you the best available loan products. From choosing the right home loans, working capital, or project finance, we’ve got you covered! Get in touch with us today. Find solutions that fit your business the best!