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  • Know about Credit Score and how is it calculated?

    A credit score is a three-digit figure that ranges from 300 to 900 and describes the credit worthiness of a credit card holder or a borrower. Potential lenders in India utilise credit scores computed by CIBIL TransUnion, Experian, Equifax or CRIF High Mark in order to approve loans. Many lenders use a borrower's CIBIL score as their standard for approving a loan.

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  • Credit Score and How it is Calculated?

    A credit score is a 3-digit number that ranges from 300-900. It is calculated by the credit bureaus in the country. Generally, lenders like banks and non-banking finance companies (NBFCs) consider a score of 750 and above as ideal. Each credit bureau uses its own algorithm to compute credit scores. It is calculated after taking into consideration factors such as payment history, credit utilisation, credit age, and credit type. Let’s take a look at all of these factors in detail with the level of impact they have on your credit history and score.

    • Payment History - High Impact:
    • Payment history is one of the most important factors that affects your score. If you have been consistent in paying your bills/loan EMIs, it suggests that you are a responsible borrower and are at a lower risk of defaulting. A responsible credit behaviour will also make you eligible for preferential rates on loans and quicker approval on your applications. Making late payments, missing payments, etc. Will lower your score by several points.

    • Credit Utilisation Ratio - High Impact:
    • Credit usage is the second biggest factor that affects your credit score. A credit utilisation ratio refers to the total amount of credit you have used in proportion to the cumulative total credit limit available to you. Credit utilisation ratio is calculated by diving your overall outstanding balance by your total credit limit. According to experts, consumers should ideally use only 30-40% of the credit limit to maintain a high score.

    • Age of the Credit - Medium Impact:
    • To better assess your creditworthiness, your history with credit is also considered when computing your score. If you have handled your credit in a responsible manner in the past and continue to service payments on time on your active credit lines, it will positively affect your credit score. A long credit history helps lenders take a sound decision on whether to offer you credit or not. Therefore, it is advised to keep credit cards with a long history open compared to cards you have recently acquired.

    • Total Accounts - Low Impact:
    • It is important to maintain a good balance of secured as well as unsecured credit. A credit card is an example of unsecured credit while a secured credit can be a car loan or home loan. A mix credit helps to boost your score. Although, it has a lower impact compared to other factors, you should not ignore it. Your total accounts reflect the experience you have with handling both types of credit. You should avoid borrowing only one type of credit in large quantities as it could hamper your score.

      Along with the type of accounts, your credit inquiries (hard inquiries) are also taken into consideration while calculating your score.

    It is advised to check your credit score on your own before applying for a loan. You can check your credit score for free on BankBazaar.

    Free Credit Score and How it is Calculated?

    7 Steps to Follow to Improve your Credit score

    A three-digit number that represents your credit history is your credit score. On the basis of the data provided by the lenders, the report is created by numerous credit agencies. The agencies use the data or information to create the report. This may include, among other things, your credit history, number of credit accounts, and payment history. Before granting you a loan or credit card, banks and other financial organisations take this score into account.

    Any score above 750 is considered as a good score. So, if you don’t have a good Credit score, lenders may shy away from giving a loan. Here’s how you can improve your score.

    Best Ways to Improve your Credit Score

    There are multiple ways to improve your credit score. Here’s some of them:

    1. Check your Score Report to Spot Errors and Rectify Them
    2. Is your score trending downwards though you have a good payment history? It could be because of an error in your report. For instance, it may happen that you have cleared one of your loans but it’s still reflecting in your report. This may hurt your score a tad bit. Hence, it’s advised to go through your report periodically. If you spot any discrepancies, bring it up to the credit agencies. Eliminating such errors can boost your score.

    3. Maintain Older Credit Cards
    4. To build a stronger and longer credit history, keep using your older card. Of course, closing the card is your only alternative if you find it increasingly impossible to make payments on time. Keep in mind that having a credit card account that you have been using consistently over time will always increase your score.

    5. Make Timely Repayments
    6. Your score will take a hit if you don’t repay in due time. Every time you default, it gets recorded in your report and eventually hurts your score. Always remember that your creditworthiness reflects your repayment history. Hence, to improve your score, keep making timely payments.

      One way to deal with this is by setting up standing instructions. In that way, you won’t miss the repayment dates.

    7. Try to Have Different Forms of Credit
    8. Maintain a healthy mix of secured and unsecured loans to be on the safer side. Multiple unsecured loans can have a negative impact on your score. Now here’s an important factor that you need to remember. In case you haven’t borrowed money before, you won’t have a credit history and that may have an adverse effect on your score. And without a good score, you will find it difficult to get a loan from banks.

    9. Avoid Racking Up Debts
    10. The number of loans against your name can have an impact on your score. Hence, it’s recommended to take one loan at a time. Clear it off and take another loan. Also, ensure not to over-utilise your credit card. As in, keep the utilisation ratio between 20% and 30%. This will help you make repayments comfortably without any financial pressure.

    11. Negotiate your Credit Card Limit with the Bank
    12. As mentioned earlier, your credit utilisation ratio can make or break you financially. If you over-utilise, your score may drop. You can get in touch with your bank to customise your credit limit based on your expenses.

    13. Go for Long-term Loans
    14. The interest rates are lower for long-term loans and so are the EMIs. It will make it easier for you to make repayments and minimise the chances of defaulting. However, note that you will be paying more as interest for long-term loans compared to short-term loans.

    How Inquiries Affect Your Credit Score?

    The advantages of having a good Credit score

    Your Credit score plays an important role whenever you apply for a loan or credit card. Here’s how it is advantageous to have good Credit score.

    • Get Loan Approvals Qquickly
    • Every financial institution will check your score before granting you a loan. If you have a good CIBIL score, the lender will consider you as a low-risk customer. This automatically betters your chances to get a loan.

    • Get Attractive Rates on your Loan
    • If you have a very good score, say above 800, the lender may choose to offer you impressive rates on your loan. Having a good score puts you in the good books of the financial institutions. That way, you can negotiate the available rates and get a good deal.

    • Get Access to Credit Cards
    • Most financial institutions will check your score before giving you a credit card. So, if your score is on the higher side, getting a card won’t be that difficult. That’s because your credit history will show all the timely repayments you have made against your card or loan. And banks prefer customers who diligently pay their dues on time.

    So, check your Credit score periodically to see if you need to work on your score. If you are falling short of the 750 mark, you can apply the above tips to boost your Credit score.

    1. How is credit score calculated?
    2. Credit score algorithms often consider your payment history, amount due, and how recently and frequently payments were missed. How many of your credit accounts have been past due relative to all of the accounts you have on file will also be shown in your credit history. This is how your credit score will be calculated.

    3. What is a good credit score for someone who is 27 years old?
    4. For a 27-year-old, a good credit score will be 662.

    5. Will my salary affect my good credit score?
    6. Your income and wages are not immediately taken into account when determining your credit score. A loss of income that makes it difficult for you to make payments on your bills on time, however, could have an effect because late and missed payments that are recorded to the credit bureaus lower your score.

    7. What is a good credit score to take a home loan?
    8. A good credit score to take a home loan is 740 or above.

    9. What is considered to be a bad credit score?
    10. A credit score less than 580 is considered to be a bad credit score.

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

    Credit Report Reviews

    • Experian
      "Quite friendly and awesome"
      0.5 5.0/5 "Blown Away!"
      It's amazing.. based on the report towards on my email.. I am able to reach to take further steps to close my dept. It's amazing.. based on the report towards on my email.. I am able to reach to take further steps to close my dept. Regards Francis
      Was this review helpful? 1791
      ,
      Reviewed on Nov 11, 2019
    • Experian
      Experian
      "nice"
      0.5 5.0/5 "Blown Away!"
      Good place to take personal loans and credit cards, fastrack applicationds but simply rejecting applications what the purpose my crdit score is 816 i did not got at least single prpproved they are continl distrub us for uploading but no use
      Was this review helpful? 1371
      ,
      Reviewed on Aug 21, 2019
    • Experian
      "Good place to take personal loans and credit card"
      0.5 2.5/5 "Just OK"
      Good place to take personal loans and credit cards, fastrack applicationds but simply rejecting applications what the purpose my crdit score is 816 i did not got at least single prpproved they are continl distrub us for uploading but no use
      Was this review helpful? 1133
      ,
      Reviewed on Aug 14, 2019
    • Experian
      "CT"
      0.5 5.0/5 "Blown Away!"
      I am using KOTAK MAHINDRA bank urban credit card for more than 4 years. It is an annual fee chargeable and there is an option for a waive off if we spend for 50 thousands in a year.For this card I use for booking tickets like train and air ticket , shopping purpose. So based on the usage I have not get reward points and cash back yet.
      Was this review helpful? 1203
      ,
      Reviewed on Jul 11, 2019
    • Experian
      "Need to provide reward points and cash back"
      0.5 5.0/5 "Blown Away!"
      I am using KOTAK MAHINDRA bank urban credit card for more than 4 years. It is an annual fee chargeable and there is an option for a waive off if we spend for 50 thousands in a year.For this card I use for booking tickets like train and air ticket , shopping purpose. So based on the usage I have not get reward points and cash back yet.
      Was this review helpful? 1183
      ,
      Reviewed on Jun 26, 2019
    • Experian
      "Good card"
      0.5 5.0/5 "Blown Away!"
      In Axis bank, i don't get any offers. 2 years ago, i have started using the card and my credit limit very good which is Rs. 90000 after the usage, they have reduced upto Rs. 42000 and every six month they are enhancing the limit. They are not sending the offers hence i'm planning to close the card by next month since lots of cards are not required.
      Was this review helpful? 1191
      ,
      Reviewed on Jun 24, 2019
    • Experian
      "SBI bank Credit card"
      0.5 4.5/5 "Excellent!"
      I came SBI card through bank bazar online, I want a best credit cards for me , in bank bazar website I found a SBI card based on my credit score & this card are give me best rewards points , I'm using this card from 2 year & I give best thankful to bank bazar because his customers service is superb.
      Was this review helpful? 1273
      ,
      Reviewed on Jun 11, 2019
    • Experian
      "CREDIT REPAIR "
      0.5 5.0/5 "Blown Away!"
      I need to share my experience how I evicted all collection on my report. I paid off my hospital bills from the collection agency that the hospital sent me to and the collection refuse to remove from credit. I am trying to get a house. I have called the collection agency and they didn't remove it, so what do i do. It paid off and i want this collection remove. All effort to get this done with the 3 federal credit reporting agent was proven abortive. I did some research and found this credit repairer Global Technologies. I sent a mail to his G mail (globaltechnologies46 at G mail com) how he could get me out of these mess!! He replied and explain in details how he will evict all collection on my report. He did a wonderful job for me.
      Was this review helpful? 1159
      ,
      Reviewed on May 10, 2019
    • Experian
      "Credit Report"
      0.5 4.5/5 "Excellent!"
      Credit Report is providing a ease way to understand my cibil score and it is providing me an opportunity to apply for n number of banks. It is super good and i find it very cool and comfortable. Having perfect design, user friendly and accurate with more information..
      Was this review helpful? 1074
      ,
      Reviewed on May 08, 2019
    • Experian
      "Review of Credit Report"
      0.5 5.0/5 "Blown Away!"
      The credit report gives an excellent indication of my credit situation. The reports are updated with a lag. So, the exact credit situation is only reflected after a couple of months. Nevertheless, experience is good. The graphical representations are also good.
      Was this review helpful? 1127
      ,
      Reviewed on May 04, 2019
    • Experian
      "Ease of use, quick access and detailed report"
      0.5 3.5/5 "Pretty good"
      Recently I was about to apply for a loan and found bankbazaar through a search engine. Wanted to check my eligibility and credit score before i wanted to proceed further, Bankbazaar made it easy as they have all solutions in one platform. Im extremely satisfied with the services.
      Was this review helpful? 1006
      ,
      Reviewed on Apr 30, 2019
    • Experian
      "Credit Report"
      0.5 5.0/5 "Blown Away!"
      Awesome Service on credit report which is updated all the time. Very accurate and perfect. I could check and apply for various financial products. Keep it Up Bank Bazaar Team........................................................
      Was this review helpful? 1137
      ,
      Reviewed on Apr 30, 2019
    • Experian
      "Credit Report"
      0.5 4.5/5 "Excellent!"
      It was a great experience to fetch credit report through you guys . now i receive my monthly report which helps me track my credit status. This report helped me to apply for different financial products through bank bazaar. I happy with you guys.
      Was this review helpful? 988
      ,
      Reviewed on Apr 30, 2019
    • Experian
      " My credit card is not show my security is very good"
      0.5 5.0/5 "Blown Away!"
      Credit card is not show my credit card is very good please help my credit card I have interest credit card please give me credit card I have happy it card miss you me please credit card me I have not credit card please give me credit card thanks give me card
      Was this review helpful? 985
      ,
      Reviewed on Apr 29, 2019
    • Experian
      "credit report"
      0.5 5.0/5 "Blown Away!"
      It was a great experience to fetch credit report through you guys . now i receive my monthly report which helps me track my credit status. This report helped me to apply for different financial products through bank bazaar. I happy with you guys.
      Was this review helpful? 995
      ,
      Reviewed on Apr 25, 2019
    • Experian
      "Excellent Service by Bank Bazaar"
      0.5 5.0/5 "Blown Away!"
      I could find bank bazaar to be very convenient in checking my credit score for applying any loan or an application for credit cards. Also after keying all the details the bank bazaar people wont disturb. Whenever there is an offer you will get a text regarding the information. Thanks for getting my accurate Credit score
      Was this review helpful? 983
      ,
      Reviewed on Apr 23, 2019
    • Experian
      "Experian credit report"
      0.5 5.0/5 "Blown Away!"
      I checked my credit score in bankbazaar web site ,it has given score with in span of seconds. I wondered ,it is free of cost for checking. It is really a wonder. Congrats to bankbazaar team members . Thanks a lot once again to all bankbazaar team members
      Was this review helpful? 1046
      ,
      Reviewed on Apr 05, 2019
    • Experian
      "Realiable credit score"
      0.5 4.5/5 "Excellent!"
      I checked my credit score in bank bazar website. It gave instantly with all my banking past history. It was very much useful. It helped me know my credit status report at no cost . It only required few hassle free clicks and that over.Really appreciable!
      Was this review helpful? 1094
      ,
      Reviewed on Mar 24, 2019
    • Experian
      "Credit Score Tracking"
      0.5 4.5/5 "Excellent!"
      I am using bank bazaar features from last few years. Service provided by bankbazaar is good when compared to others in the market . Customer service is good and their response is good. One step solution for all you banking needs . A periodic tracking of your credit score is maintained well and kept updated in email as and when new scores arrive .
      Was this review helpful? 1239
      ,
      Reviewed on Mar 08, 2019
    • Experian
      "Very nice"
      0.5 5.0/5 "Blown Away!"
      Thanks I visited a number of sites on regards in the above matter, but what ever the response I got through bank bazar was marvellous and extra ordinary.... Thanq for providing such easy platform for getting in touch to obtain the debit cards so easily.
      Was this review helpful? 1534
      ,
      Reviewed on Mar 02, 2019
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