A credit score is three-digit numeric figure that depicts one’s financial position. Cibil Score is evaluated on the basis of criteria decided by three Bureaus -Equifax, Experian, and Transunion. However, these bureaus are governed by the Fair Credit Reporting Act (FCRA).
A credit score can be checked through any Bank, Credit Card companies, or Credit Unions, that provide a free credit report. The score lies on a range of 300-850, and a score of 700 and above is considered a good score. A good cibil score ensures bank that the loan borrower is reliable, and a bad credit score could indeed make it difficult for the borrower to borrow funds.
The credit score is, however, impacted by certain reasons that include repayment history, credit utilisation, credit history, and credit applications. These factors are constantly undermined, and thus a credit score can change anytime. Maintaining a good credit score is thus an essential means to manage one’s financial reputation. It can be maintained by paying regular bills, most importantly of the credit card, utilising credit efficiently, and by avoiding over enquiring for credits. Further, keeping a constant check on one’s credit score is essential to maintain the credit score and, ultimately, to be aware of one’s creditworthiness.
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