4 Important Factors That Decide Your CIBIL Score


It is true that a good credit score makes you eligible for a loan. However, it is important to understand what are the factors that are responsible for and impact your credit score. A clear insight into the credit score factors will actually help you improve on those marks without making any mistakes. A credit score is a financial representation of an individual on the basis of his financial activities and records in the past. The score is enough for a loan provider to understand if the borrower is responsible and will be able to handle a debt, based on past records. Hence, a good Experian credit score makes you a responsible and safe borrower. Here are the top 4 ways by which you can increase your credit score:

●     Get a balanced credit mix: There are various types of lines of credit available in the debt portfolio. You get options like secured, unsecured, revolving, and installment loan options. One needs to saturate his or her credit mix with all kinds of loans, and not just concentrate on one type of loan. A perfect credit mix option would be a credit card, personal loan, and auto loan.

●     Payment records: Payment record takes around 20% of your credit score calculation. So, if you are having a bad credit score, your delayed payments have probably been the cause. So, automate your payment and pay the bills on time. It is important that you track the due date, automate your payment and have a clean track record.

●     Too many loan applications: Do you keep on applying for a loan even when you don't need it? Well, if you do so, you are unknowingly hurting your credit score. Too many loan applications mean you are in need of finances within a short period of time and this portrays you to have weak financial health. This will not be a good condition for you.

●     Credit age: Credit age is important for a good credit score. The longer the credit age the better it will be for your credit score. It is important to keep your credit accounts open. This will not cost you, nor do you have to use it. An open credit account will always improve your credit score. New credit accounts do not contribute positively to your credit score.

Finishing up

In order to make borrowing easy, a good Experian credit score is one of the best ways to explore the debt portfolio. A good credit score makes approval instant and offers low rates. Start your credit score check free online process today, to keep yourself informed for improvement.

 

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