A credit score is a three-digit number ranging from 300 to 900. Credit score can be calculated using the information in your credit report, including your repayment history, the amount of debt you have, utilization of credit limit and the length of your credit history. Credit scores are used by Banks and Financial Institutions while lending and offering Credit Cards. A credit score is checked when you are applying for any kind of Loan or Credit Card. It’s important to remember that everyone’s financial and credit situation is different so that a credit score can differ from person to person. Ranges are depending on the credit scoring model. Generally, credit scores from 600to 650 are considered fair; 700 to 750 are considered good; 750 to 800 are considered very good, and 800 and up are considered excellent.
Lenders generally see credit scores 700 and up as acceptable or lower-risk borrowers. Those with credit scores from 600 to 650 are generally seen as risky borrowers, those with lower scores fewer than 600 falls into the poor credit range and face difficulty in getting loans. Different lenders have different criteria when it comes to giving credit, which may include information such as your income or other factors. That means the credit scores they accept may vary depending on the criteria. There are many different scoring models available, and those scoring models may differ depending on the type of loan and lenders’ preference for certain criteria. Credit scores are decision-making tools that lenders use to help how likely anyone wants to repay your loan on time. Credit scores are also sometimes called risk scores because they help lenders. Having good credit is important because it determines whether you’ll qualify for a loan or not. And, depending on the interest rate of the loan you qualify for, it could mean the difference between thousands and even lakhs of rupees in savings. Good credits scores is very important thing lenders will look at when deciding to extend you credit or offer you a loan. This is all about credit score.