How is the credit score calculated: Credit score plays a vital role in getting loans approved from banks. Those who have a bad credit score find it difficult to get loans approved. The credit score ranges from 300 to 900. Generally, a score of a minimum of 750 is considered to be excellent. Those who have a higher credit score can avail loans easily. But do you know how the credit score is determined? 


Credit Bureau



  • Many credit bureaus decide the credit score of the customers.

  • Major credit bureaus include Trans Union CIBIL, Experian, CRIF High Mark, and Equifax.


What do the credit bureaus do?



  • They keep a record of your paid bills and loan installments every month.

  • They calculate your credit score on the basis of few years of record.


Credit Utilization Ratio



  • Credit Utilization Ratio (CUR) means how much you use a credit card in a month you are of the available credit limit.

  • The CUR has a great impact on the credit score. Your CUR depends on how much you use your credit card.

  • The more you use your credit card, the higher will be your CUR.


Old Credit Card



  • Your loan is very old or using a credit card for many years is considered good for your credit score.

  • In fact, it shows that you use your loan properly and you pay their installments on time.


Do not apply again and again



  • Do not apply repeatedly for loans or credit cards.

  • This is not considered good in terms of credit score. This brings down the credit score.


Pay the loan on time



  • Pay your loan EMI regularly and don't miss it.

  • If you make a late payment or default once, it will result in

  • Credit score and can drop up to 100 points.