Credit Score Everyone gives
so much importance to your credit score? Firstly, we should know
that what is a credit score? And secondly how it is determined.
Basically, your credit score is dependent on many factors such
as your credit and the amount of money that you have loaned out
for yourself. When your credit score is calculated, every item
is passed through a system where points are awarded to you or
deducted from your score based on the status of the terms .The
question that may be coming into your mind is how they anaylise
that where to deduct the points and where to award the points.
the system uses a simple formula for this ,like take an example
for when points are awarded if you have loaned a specific amount
and you are paying the monthly installements on time then you
will be awarded points. And ,if you are late on payments, and
have many credit cards close to maximum the the points will be
deducted from your credit score.
The system then evaluates your credit score
from awarded points and deducted points to come to final total.
This score can range from 330 to lower 800’s.Then this credit
score is a benchmark for you to your lenders to know that can
you make the payments on time.
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