Why Your Credit Score Changes – The New Indian Express

A credit score is a crucial factor that different financial institutions take into consideration when evaluating a loan application. Therefore, it is essential to calculate a CIBIL score using a free CIBIL score calculator before an individual applies for a home loan. If the CIBIL score is low, it becomes imperative to know the reasons why so that individuals can easily improve it to meet the eligibility criteria.

10 reasons to change your credit score

Here are the reasons that can dramatically change your credit score:

1. Length of credit history

The length of credit history is an important factor that affects an individual’s credit score. As an individual makes a payment using their credit card, the credit score keeps improving. Ideally a good CIBIL score range ranges from 600 to 900. Also, if there is a negative mark in the credit report, it disappears over time.

2. Debt repayment history

Timely debt repayment prominently affects an individual’s credit rating. Loan applicants who repay their debt within the term of the loan and pay EMIs in a timely manner have better credit scores than those who do not. This in turn will allow them to receive larger amounts of credit at more attractive interest rates.

3. Differences between credit bureaus

There are four credit bureaus, namely Equifax, TransUnion, Experian, and CRIF Highmark, which have different parameters by which they provide a credit score. There may therefore be a variation in the credit ratings assigned by each of these institutions. Borrowers should know what score their preferred financial institution is tracking before applying for a loan.

4. Industry specific credit score

There are several financial institutions that generate credit reports based on certain parameters that are quite different from nationwide ARCs. For example, if an individual applies for a home loan, only his previous home loan files are taken into account.

5. Debt to credit ratio

Many times individuals tend to exceed their credit limit for a month. To some extent, this does not affect credit rating. However, if spending exceeds about 30% of the limit almost every month, it can hurt your credit score. Therefore, to maintain a good credit score, it is essential to limit the use of the credit card. Individuals can also increase their credit card limit to protect against these situations.

6. Thorough Investigations

If a person is facing a lot of questions related to their credit history, it can significantly lower their scores. This often happens when an individual tries to borrow very often, but financial institutions repeatedly reject their loan application. It is therefore advisable to refrain from frequent loan applications. At the same time, borrowers have to go through the eligibility criteria to stay safe from loan denial.

7. Adverse Public Records

Situations such as bankruptcy, court judgments or tax liens can negatively affect an individual’s CIBIL score. Therefore, if a borrower encounters such a situation, the best thing to do is to settle them before they become public. This can prevent a drop in the CIBIL score.

8. Changes to the debt report

As soon as an individual begins to repay his EMI, his debt decreases. This gradually increases an individual’s CIBIL score. Once the loan has been fully repaid within the stipulated time, the CIBIL score returns to what it was before taking out the loan, and can even sometimes increase, proving the credibility of the borrower.

9. Opt for new credit cards

Some people opt for multiple credit cards to meet their large monetary needs. However, this too can lead to a significant drop in the CIBIL score. It is considered that an individual with several credit cards has no control over his expenses. It is therefore preferable to avoid such practices to avoid a significant reduction in their CIBIL score.

10. Frequently exceeding the credit limit

If a person continues to exceed their credit limit, it negatively affects the credit score. This is because they seem unable to manage their finances carefully. Thus, it is important to control credit card spending. Also, borrowers can apply for a higher credit card limit to avoid going over the limit.

In addition to calculating CIBIL scores using a free CIBIL score calculator, individuals should assess their credit report monthly. This would help them identify their mistakes and help them improve them by applying new strategies. Moreover, if there are any discrepancies, they can notice them and resolve them at the earliest to avoid serious consequences in the future.

*Terms and conditions of application

Disclaimer: This content is part of a marketing initiative. No TNIE Group journalist is involved in the creation of this content.

A credit score is a crucial factor that different financial institutions take into consideration when evaluating a loan application. Therefore, it is essential to calculate a CIBIL score using a free CIBIL score calculator before an individual applies for a home loan. If the CIBIL score is low, it becomes imperative to know the reasons why so that individuals can easily improve it to meet the eligibility criteria. 10 Reasons for Change in Credit Score Here are the reasons that can significantly change your credit score: 1. Length of credit history The length of credit history is an important factor that affects a person’s credit score. individual. As an individual makes a payment using their credit card, the credit score keeps improving. Ideally, a good CIBIL score range is from 600 to 900. Also, if there is a negative score in the credit report, it disappears over time. 2. Debt Repayment History Timely debt repayment prominently affects an individual’s credit rating. Loan applicants who repay their debt within the term of the loan and pay EMIs in a timely manner have better credit scores than those who do not. This in turn will allow them to receive larger amounts of credit at more attractive interest rates. 3. Differences between credit bureaus There are four credit bureaus, namely Equifax, TransUnion, Experian and CRIF Highmark, which have different parameters according to which they provide a credit score. There may therefore be a variation in the credit ratings assigned by each of these institutions. Borrowers should know what score their preferred financial institution is tracking before applying for a loan. 4. Industry Specific Credit Score There are several financial institutions that generate credit reports based on certain parameters that are quite different from national credit rating agencies. For example, if an individual applies for a home loan, only his previous home loan files are taken into account. 5. Debt Ratio Many times individuals tend to go over their credit limit for a month. To some extent, this does not affect credit rating. However, if spending exceeds about 30% of the limit almost every month, it can hurt your credit score. Therefore, to maintain a good credit score, it is essential to limit the use of the credit card. Individuals can also increase their credit card limit to protect against these situations. 6. In-Depth Inquiries If a person is faced with in-depth inquiries related to their credit history, it can significantly lower their scores. This often happens when an individual tries to borrow very often, but financial institutions repeatedly reject their loan application. It is therefore advisable to refrain from frequent loan applications. At the same time, borrowers have to go through the eligibility criteria to stay safe from loan denial. 7. Adverse Public Records Situations such as bankruptcy, court rulings, or tax liens can negatively affect an individual’s CIBIL score. Therefore, if a borrower encounters such a situation, the best thing to do is to settle them before they become public. This can prevent a drop in the CIBIL score. 8. Changes in Debt Report As soon as an individual begins to repay their EMI, their debt decreases. This gradually increases an individual’s CIBIL score. Once the loan has been fully repaid within the stipulated time, the CIBIL score returns to what it was before taking out the loan, and sometimes it can even increase, proving the credibility of the borrower. 9. Opt for new credit cards Some people opt for several credit cards to meet their large monetary needs. However, this too can lead to a significant drop in the CIBIL score. It is considered that an individual with several credit cards has no control over his expenses. It is therefore preferable to avoid such practices to avoid a significant reduction in their CIBIL score. 10. Frequent Exceeding Credit Limit If a person continues to exceed their credit limit, it negatively affects their credit rating. This is because they seem unable to manage their finances carefully. Thus, it is important to control credit card spending. Also, borrowers can apply for a higher credit card limit to avoid going over the limit. In addition to calculating CIBIL scores using a free CIBIL score calculator, individuals should assess their credit report monthly. This would help them identify their mistakes and help them improve them by applying new strategies. Moreover, if there are any discrepancies, they can notice them and resolve them at the earliest to avoid serious consequences in the future. *Terms and conditions apply Disclaimer: This content is part of a marketing initiative. No TNIE Group journalist is involved in the creation of this content.