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Credit Scores- How Do They Work??

Credit Score is a 3-digit number, which is basis to measure your credit worthiness. So, it is very important to make a good financial plan so as to maintain your credit score.

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Credit Scores- How Do They Work??

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  1. CREDIT SCORE RANGE Credit Scores- How Do They Work??

  2. Things to know • What is Credit Score Range? • Constituents of Credit Score • Credit Scores- How do they work?

  3. What is Credit Score Range? • Credit Score is a 3-digit number that can be evaluated based on the information provided in your credit report. • Credit score rangefrom 300 to 850. But, a good credit score lies in the range from 700 to 850. • A good Credit Score shows your capability to pay money on time. It's a basis of your credit worthiness. So, having a good credit score is always beneficial. The higher will be your score, the better.

  4. Constituents Of Credit Score • Payment History(35%) • Turning Credit Balances to Maximum Limits (30%) • Length of Credit History (15%) • New Credit and Inquiries (10%) • Sorts and Mixture of Credit (10%)

  5. Payment History(35%) Your portion history is the most basic segment of credit scoring. Liquidations, aggregation accounts, direct pays and late portions, abandonments, judgments, and liens can conversely impact your budgetary appraisal. Regardless, an set up history of on-time portions and a spotless record as a purchaser will firmly influence your FICO appraisals and addition them after some time.

  6. Turning Credit Balances to Maximum Limits(30%) The second most noteworthy figure credit scoring starts from how you utilize your turning credit. The credit scoring models will look overwhelmingly upon how much turning credit you have available stood out from the sum you have used. Your ideal credit extents should be around 20-40 percent use. If you do comprehend that you have procured more than half of your open credit limit on your card or your modify is moving close beyond what many would consider possible, you should either endeavor to pay your conform down to the 40% stamp or call your charge card association and check whether they can raise your purpose of imprisonment.

  7. Length of Credit History(15%) The more drawn out and more settled your record as a customer seems to be, the better to say the least positive of an impact it can make. Some person who pays their bills on timetable for a 10 year time span is a significantly enhanced risk than some person who simply has a 1 year history of paying their bills on Time. The more you have developed credit accounts, the better it is for you. It is possible to at present have a respectable FICO rating with a short credit history; however moneylenders may not bolster you for perfect financing decisions due to the nonappearance of history still.

  8. New Credit and Inquiries(10%) • The measure of new credit you have opened will have reasonably a minor impact on your money related evaluations. If you have different demand coming to fruition in light of applying for a lot of new credit and incorporate various new trade lines in your credit report, this can damagingly influence your FICO appraisal. • Credit asks for an impact your FICO rating, not a ton, but instead enough to lower your score. This is not to state don't seek around or don't have more than one firm draw your credit when wanting to buy an auto or a home. You surely should use due creativity and shop between a few credit pros to guarantee you are getting a tolerable game plan.

  9. Sorts and Mixture of Credit(10%) Having a mix of the diverse sorts of credit will small influence your FICO evaluations. For example; a man who has a not too bad mix of recognize, for instance, a home propel, auto propel, 2-4 Master cards and potentially an individual credit this could be respected a fair mix of credit versus another person who has 15 charge cards and no other credit. The ideal number of Master cards to keep up is 2-4. In addition, distinctive sorts of liabilities are fundamental to have, for instance, partition credits and a home advance credit.

  10. Credit Scores- How Do They Work? There are 3main agencies that record credit scores. These agencies are: Equifax, Experian and TransUnion. Each of these agencies collects information individually. As they use independent source for collecting information, credit score may differ for different credit agencies. As we know, good credit score lies between the range 700-850. So, what you should do is to check your credit report at least twice in a year and make your financial plans accordingly. If you have any problem regarding your credit then, you can consult a reputed credit repair firm or financial consultant.

  11. THANK YOU !!

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