What affects your credit rating? To find


A credit score is a number that determines one’s ability to repay credit on time. In other words, it is proof of its solvency.

Anurag Sinha, Co-Founder and CEO of OneScore and OneCard, says, “Before extending any form of credit, a potential borrower’s credit behavior is thoroughly analyzed by credit bureaus and the score is assigned out of 900” . A credit score above 750 is considered healthy.

Several factors affect its credit rating, such as;

  • Past credit repayments – Whether it’s your EMI home loan or your monthly credit card bills, timely payment is key to securing a high credit score.

Sinha says, “Missing even just one EMI deadline can significantly lower your credit score and it can take a long time to make up for that loss.”

  • Use of credit – If you tend to splurge and exhaust your credit limit every month, it will have a significant impact on your credit score. When using your credit card, you might want to grab the best deals and cash back rewards that are rewarding, however, paying your dues on time should be considered sacrosanct.

“Excessive use of your credit limit each month indicates that one is used to living life on the limit and it can lower one’s credit score,” Sinha points out.

  • A number of difficult requests – Whenever you apply for a new loan or credit product, banks or financial lenders pull out your credit file to check your credit score with one or more credit bureaus. This Sinha explains “is registered as a ‘serious inquiry’, and too many of these difficult inquiries can cause his credit rating to drop, in addition to that, it will also reduce his ‘credit age’.” Therefore, apply for a loan or credit card only if necessary or in an emergency.
  • Composition of credit – It is advisable to create a combination of different credit products, as this can play an important role in improving your credit score while building you a good credit history. This, explains Sinha, “one can use a combination of secured and unsecured loans, credit cards, line of credit products, etc. A healthy credit mix showcases stability and the ability to manage credit responsibly. »
  • Delay reporting discrepancies – Many times, even after adhering to all good credit practices, some mistakes can lower your credit score. Nonetheless, experts say that with the right metrics, these discrepancies can be sorted out. However, “failing to report these discrepancies in time can significantly lower one’s credit score and recovery can take a long time,” Sinha points out.
  • Scratch old credit cards – While you upgrade your maps to better and premium maps, closing your old maps can negatively affect your score. “Older credit cards demonstrate its ability to manage credit maturely and prove its consistency,” adds Sinha.

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