Wednesday, 29 July 2015

What Exactly Is A Credit Score?

Welcome to Free Score India's First Blog Post.

So first let’s talk about the basics;

what exactly is a Credit Score?
A credit score is basically a numeric data to measure the credit worthiness of an individual. It is calculated on the basis of information given in the credit report, which is received from the credit bureaus. Lenders & Banks use credit scores to evaluate the potential risk that could arise by giving a loan/ credit card to an individual. Lenders decide on the rate of interest/loan amount on the basis of the credit score. The better the credit score you, the better interest rates you would get for your loan.

What is a credit report?

A Credit report contains all information about your credit history and payment records. The number of loans you have taken, how well you have serviced them , defaults in payments- everything about your credit life, you’ll find in your credit report! This credit report is then used to determine your credit score. Any defaults/ bankruptcies on your credit score could damage your credit score and it may take a long time to correct it. Checking your credit report periodically is a good practice for your financial life.

Therefore it is very important to be aware of your credit score as it is the deciding factor in getting a loan or any other type of credit.

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