What Is A Good Credit Score?

Credit score is a three digit summary of credit worthiness. This score ranges from 300 to 900 with 900 being the best score. A Credit Score of 750 and above could mean easy sanctioning of loans. Banks and NBFCs easily sanction loans on having a credit score of 750 and above.

Factors which affect credit score:

Payment History: Credit history is very important when it comes to a credit score. Around 35% weightage is assigned to payment history. A lender gets an idea on how consistent you have been with repayments.

Amount to be repaid: This is the loan amount due and credit card outstanding. Around 30% weightage is assigned. This is the loan amounts availed from banks and NBFCs.

Credit Mix: This is the amount of secured and unsecured credit availed. A personal loan or credit card is a prime example of unsecured loans. These loans are not secured against collateral. Home loans and car loans are an example of secured loans. These loans are secured against a house or car. Around 10% weightage is assigned to credit mix.

Length of credit history: This is the duration of active credit accounts. It’s wise not to close old credit cards as this increases length of credit history. Around 15% weightage is assigned to length of credit history.

New Accounts: Availing multiple credit cards and taking many loans lowers credit score. Whenever you apply for credit, banks and financial institutions check credit history and credit score. These are hard enquiries and lower credit score. Around 5% weightage is assigned to new accounts.

To know more click on the link: What Is A Good Credit Score?

10 Smart Ways To Make The Most Out Of Credit Card

Credit cards have made purchasing things, simple and advantageous. You essentially purchase now and pay later. Credit cards likewise offer different advantages like reward points, which have pulled in numerous youngsters to credit cards.

10 Smart Ways To Make The Most Out Of Credit Card

These are 10 tips on how you can make the most out of credit cards:

1. Choose that credit card which suits spending needs:

Think about spending needs and propensities while picking a credit card. Each credit card has diverse advantages and rewards. Select that credit card which will give most extreme advantages. Let's assume you are a successive voyager. A movement credit card that offers rewards like air miles, in vouchers and parlor access at air terminals is perfect for you.

2. Don’t buy more than you can repay:

Credit card holders tend to purchase more than they can repay. This is the reason they fall into a debt trap. They overspend and battle with reimbursements. Spending choices ought to be constructed not with respect as far as possible but rather on a capacity to repay.

3. Avoid paying minimum balance:

Banks don't charge a premium in case you're expeditious in paying an extraordinary levy. Individuals as a rule fall for the base adjust choice. This is a trap in which you get caught and think that its hard to get out. 

Paying the base adjust against credit card contribution keeps away from punishment on late reimbursements, yet regardless it has detriments. The outstanding balance continues to attract interest at 2-3% a month.

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10 Smart Ways To Make The Most Out Of Credit Card