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What is a Good Credit Score & How to Build One?

A good credit score typically falls in the range of 700 to 749 or higher, depending on the scoring model. To build a good credit score, make timely payments on credit accounts, keep credit card balances low, avoid opening too many new accounts, and monitor your credit report for errors. Consistent responsible credit behavior over time can help improve and maintain a good credit score.<br><br>Read more: https://ccduniya.com/what-is-a-good-credit-score-how-to-build-one/

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What is a Good Credit Score & How to Build One?

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  1. What is a Good Credit Score & How to Build One?

  2. 1. What is a Credit Score? A credit score serves as a numerical reflection of your creditworthiness. In the Indian context, credit score usually spans from 300 to 900, where more elevated scores indicate improved credit health. This three-digit number reflects your credit history, repayment behavior, and overall financial responsibility.

  3. 2. Why Does it Matter? Lenders, including banks and credit card companies, refer to your credit card score to evaluate risk associated with lending your money. A favourable credit score not only increases your loan approval but also facilitates access to lower interest rates. It’s a financial resume that speaks volumes about your reliability as a borrower.

  4. 3. Understanding the Components: Break Down the Components of a Credit Score • Payment History (35%): Timely payments on credit cards, loans, and EMIs. • Credit Utilization (30%): The portion of your available credit limit that you’re using. • Length of Credit History (15%): How long you’ve been utilising credit.

  5. 4. Checking Your Credit Report: Regularly review your credit report for inaccuracies. Obtain your free annual credit report from credit bureaus like CIBIL, Experian, or Equifax. Dispute any discrepancies to maintain accurate credit information.

  6. 5. Don’t Close Old Accounts: The length of your credit history matters. Keep old credit cards and accounts open, even if you’re not actively using them. Closing accounts can shorten your credit history, potentially impacting your score.

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