All you need to know about Credit Score!

It is that three-digit number that will determine your financial fate. That’s right! It is a financial entity’s way of judging your ability to repay borrowed money. Hence, when it comes to borrowing in general, be it a loan or a credit card or even to get on the Cred App, your credit score is a prerequisite / an eligibility checker of the borrower’s accountability. 

This score is a three-digit score that usually ranges between 300 to 850. 300 being a bad score with 700 and beyond being considered as good scores. In India, Credit Information Bureau Limited (CIBIL) is the first authorized credit bureau and hence people generally consider the CIBIL score to avail credit facility. There is a complex mathematical formula used to calculate the credit score as there are many factors at play like credit history, repayment history, and a lot more. Thus, giving a snapshot of your credit health. 

Your credit score can be maintained in several ways, as it is one of the most integral aspects of maintaining your personal finances: 

1. Taking multiple loans at the same time is not the wisest option as it may lower your credit score. Try taking one loan at a time to ensure that you come across like a credit-worthy person whose intent is genuine. 
2. There is a ratio called the credit utilization ratio. It basically measures how much credit you’ve used against your credit limit. To make sure your credit score is stable, the ratio should be 30%. So try not to spend up to the entire credit limit of your credit card in a month. 
3. Do not cancel your old credit card although it may seem like the right thing to do. If you’re able to successfully maintain them and pay them timely, they will reflect your rich credit history. 
4. Check your CIBIL score regularly. Be it before applying for a new loan or even just on a regular basis, keep a tab on it. It will bring to light common errors that you may have missed on oversight. 
5. Lastly, the most important way to maintain your credit score is by paying EMIs your credit card bill reflects every month. Please do not just pay the minimum due as the high-interest rate will not only result in you paying a lot but it will reflect poorly on your score as well.

Even with chits, credit score can be a beneficial ally. At myPaisaa, we check your credit score and provide eligibility only to those who have a score of 700 and above. Building a base of financially stable members is one of the reasons we rely on credit score of the member.

Not sure if you meet our credit score requirements? You can check here – Credit Score Checker.

So get on, bid on, & fund on with myPiasaa, your registered & 100% digital chit fund.