Have you ever been wondering about what a credit score is? What’s all the big fuss about it? Understanding them will benefit you at some time in your life. To help you, here is all you need to know about credit scores.
What is a Credit Score?
A credit score is a three-digit figure that indicates how creditworthy you are as a person. Lenders use it to determine how likely you are to repay a loan on time if you are given one. Maintaining a high credit score is important if you want to get a personal loan quickly and at a reasonable interest rate. Your purchasing power gets significantly limited if you have a poor credit score.
How is a Credit Score Calculated?
It is hard to believe that a three-digit number can have such a significant impact on your life. Make sure your credit score is as high as feasible if you want to always have access to a secure line of credit.
But before you can learn how to boost your credit score, you must first comprehend how it is calculated. To calculate a credit score, credit bureaus analyze the following factors:
- Credit History
This accounts for 30% of your credit score. The credit history is the monthly payback record of your EMIs, student loans, vehicle loans, home loans, and other loans over the last three years. Your credit history will be good if you pay all your bills on time.
- Credit Utilization
This is worth 25% of your credit score. This is a metric for how much credit you are using. It is never a good sign if you have a credit limit of a maximum of one lakh rupees and use the entire amount every month. Lenders may see you as a high-spending individual and distrust your capacity to repay the loan on time.
- Credit Mix & Duration
This accounts for another 25% of your credit score. There are two types of loans in your credit history: secured and unsecured. A secured loan is one that involves collateral, while an unsecured loan is a personal loan that does not require any collateral. Lenders appreciate borrowers who have a mix of both types of financing. It improves your track record if you have used many of these for a long time and are paying your bills on time.
- Outstanding Debt
Your credit score is influenced by how much debt you have at any particular time. The more debt you have, the fewer credit and loans you will be eligible for in the future.
How To Improve Your Credit Score?
- If you are not sure how to increase your credit score, here are a few ways how you can:
- Pay all your bills on time to prevent defaulting on your payments.
- If you are a frequent user, get a greater credit limit.
- Check your credit eligibility and apply where your chances of getting a loan are better.
- Check your credit report for anomalies or inaccuracies on a regular basis.
- Have a healthy credit mix of various loan types and repayment terms.
- Keep track of your credit and debt payback history.
- Avoid applying for multiple loans at a time.
- Pay all your outstanding dues in a timely manner.
How To Still Get a Loan Without Credit Score?
Almost everyone needs a personal loan in their lifetime, but if you have no credit history, you’re probably worried if you’re eligible for a personal loan without a Credit score.
Facing issues with getting instant funds? The option you should probably explore is Home Credit instant personal loan.
Why Choose Home Credit Personal Loan?
- Instant Loan Approval: You can easily get an instant personal loan approval of up to ₹2.4 Lakhs.
- Quick & Easy Process: Get quick personal loan approval in just three simple steps with Home credit.
- No Credit History Required: You can avail yourself of a personal loan from Home Credit even if you are doing it for the first time.
- Minimal Documentation: Apply for an instant loan with our personal loan app and get instant approval with just 2 documents – your identity and address proof!
- Quick Disbursal: After a few checks, the approved loan amount will be credited to you within hours.
- No Collateral Required: No guarantors or collateral are needed to get approval on your personal loan application.
- Flexible Repayment Options: Our easy EMI’s and repayment tenures make our instant personal loan perfect for your needs.
- No Hidden Charges: At Home Credit, our customers come first. We keep transparency as the key to everything from start to finish. Whatever you know, is whatever you pay!
- Convenient Tenure: Home Credit offers an easy personal loan along with an opportunity to choose a suitable repayment tenure of from 6-48 months for new applicants and 9-51 months for existing home credit customers.
Steps To Apply for an Instant Personal Loan
We have a 3-step personal loan application process. Listed below are the stages of our instant loan application process:
- Enter your phone number and follow the next steps to check your eligibility.
- Enjoy instant online approval on personal loan of up to ₹2.4 Lakhs.
- Get the loan amount disbursed within hours of signing the agreement.
So, what are you waiting for? Apply for a Home Credit personal loan now and make your credit scores soar high!