What is a credit report and how is it calculated?

What is a credit report and how is it calculated?

When you apply for any line of credit, your credit eligibility is determined. There are various ways in which a loan provider gets hold of your credit record and credit eligibility. It is important to meet the credit eligibility when you look out to borrow.

An unsecured form of loan like personal finance needs good eligibility because it is an unsecured loan. The most important thing that a loan provider checks is your credit report.

What is a Credit Score?

• A credit report is a detailed statement that has all your credit records and activities stated. It comprises all the payments, debt repayment track, credit accounts and various credit activities. The report will have all the details about your past financial activities. Based on this credit, a credit score is given. This statement offers a clear understanding to the loan provider about the financial health of a borrower.

Maintaining a good credit report will open up new opportunities and borrowing will be easy.

What is included in a credit report?

Credit mix: The credit mix is the types of credit lines that an individual has. It includes all the credit products and debt that a borrower has borrowed from any financial institution. This will constitute 10% of the entire report.

Maintain a good credit mix with a balanced line of credit. That would include instalments and revolving credit. Apply For home improvement loans .

Why is credit report monitoring important?

• Credit accounts: Credit accounts are an important part of your credit report. It includes all your credit cards, bank accounts, and loan accounts. When you follow them and keep them updated, you will have a positive credit report.

• The type of credit used counts for 7%-10% of a credit score and shows if the borrower has a mix of instalments credit which includes car loans or home loans and credit cards.

How to Improve Your Credit Score?

• Payments: Payments are the most important element in the credit report.

It accounts for any payment. It could be a debt repayment or a credit card bill.

Payments can damage your credit report and any delay or default in payment will be registered on a credit report. So make sure you consider this as important.

Clix Capital Services Pvt. Ltd. Address:

901b, 9th Floor, Two Horizon Centre, DLF Phase V Gurgaon, Haryana, India – 122002 Phone Number: 1800 200 9898 Website: https://www.clix.capital/check-credit-score/