Intro:
Do you want to take a loan? Do you have a business or do you want to start any other project for which you need a loan?
Then your credit score is going to be very important for you. Any bank or any person who gives a loan will first see your credit score and knowing your credit score is a very important thing if you need a loan.
In this article, we will see what a credit score is, why it is so important and which are the top websites from where you can check your credit score for free.
What is a credit score?
Credit score is a grading system where banks or any loan giving institution give you a score which shows how much capacity you have to pay back the loan.
If your credit score is good, it means that the bank thinks that you can pay back the loan taken from them. If your credit score is low,
it means that the bank does not trust you and the bank does not think that you can repay the loan taken from you.
Why is your Credit Score Important?
You have heard about credit score but you don’t know why it is so important? If you hear this, then this information is for you.
A credit score is very important. If you want to take a loan, any bank will first check your credit score before giving you a loan.
The biggest benefits of having a good credit score are
Number one, if your credit score is good, then you will get loan approvals very quickly.
Banks will not bother you much, will not check you much, and you will get fast approvals for your loans. Second, a lot of the banks will consider you for loans at low interest rates, and third is eligibility.
If your credit score is very good, then you can very easily be eligible for any loan from various banks.
What are the factors that affect your credit score?
Although many factors can influence the credit score, the three most important factors that influence the credit score are payment history, length of credit history, and credit utilization ratio.
Payment history means what kind of transactions or payments you have made with the bank. Did you pay your bills on time?
If your payment history is clear and honest, the bank will give you a good credit score. The second key factor is the length of your credit history.
This means how many years you have been taking loans or engaging in loan-related activities. If your account is quite old, banks will generally give you a preference, and you are likely to get a good credit score.
The third and most important factor that influences your credit score is the credit utilization ratio, Every bank will give you a certain amount of credit to use.
How much percentage of the loan you use from it is your C.U.R. If you want a good credit score, then this ratio should be 10% or below.
How to Improve your credit score?
Is your credit score bad, and do you want to improve it? Don’t worry, you can improve your credit score very easily.
You just have to keep these three things in mind. Number one, always remember to deposit all your bills in the bank on time.
This will improve your credit score. Second, lower your credit utilization ratio, which means that you should use only 10% or less of the loan or credit you have.
This will also improve your credit score. The third and last point to remember is that sometimes there may be an error in your credit score report.
This means that there is no problem with your result. There are only errors in the report.
So, make sure that you read your credit report properly, and if there are any errors in it, then you should report those errors to your bank or the responsible institution.
Top websites to check your credit score for free:
Checking your credit score may seem like a complicated task, but there are websites in the market that are completely free and where you can check your credit score for free.
The best websites among them are Credit Karma, which is completely free, and you can easily go to this website and check your credit score in just a few minutes.
The second website is Credit Session, and the third is Bajaj Finserv, which are also completely free
You can visit these three websites online and know your credit score in just a few minutes for free.