This article is all about 620 credit score. It is essential for you to be aware of it and be aware of the reasons behind it and what can you get with 620 credit score.
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Your credit score is a three-digit number that signifies your creditworthiness as a borrower. Hence, the higher you score, the more favourable credit terms you get. A credit score of 750 and more is generally considered a good one, and one can reap the benefits of several financial services based on this credit score.
Suppose you have a credit score below 650. In that case, you might have to face several complications while availing a credit facility, such as high down payments, higher interest rates and even application rejections.
In case you are in such a situation, you should know how to increase your credit score by 100 points. Keep reading to know more about the same.
Building your credit score will not be a hassle for you if you have been making timely repayments and have maintained a decent credit history. However, you might find it tough to build a good credit score in case you have a bad repayment history.
Generally, one can build a good credit score within six months to one year. Those who have a credit score of 750 or more can improve their score within six months. Nevertheless, this turnaround time varies on a case-to-case basis.
So, if you are wondering how to increase your credit score by 100 points, it will depend on how you manage your finances.
Here are some of the most important factors that affect your credit score –
A credit score is basically an assessment of how disciplined you have been while paying your debts in the past. Even a single credit default, be it on a loan or credit card, will negatively affect your credit score. Further, the longer the credit bills are left unpaid, the worse the impact on your credit score.
An increase in credit utilisation beyond a specified limit negatively affects your credit score as it is considered to be an irresponsible financial habit.
Whenever you apply for any form of credit, the financial institution runs a strict check on your credit report to assess your creditworthiness and repayment potential. If a person applies for credit from multiple lenders, he/she is considered a credit-hungry candidate. Additionally, an individual's credit score takes a hit with every credit inquiry, and multiple such queries in a short span will lower the credit score by quite a margin.
A perfect blend of secured and unsecured loans is considered an ideal credit mix. Secured loans are those loans in which the borrower needs to pledge an asset to obtain the funds. Unsecured loans are loans in which the lenders sanction the funds without keeping any asset as collateral. Borrowing and repaying different types of loans timely impacts your credit score positively.
Financial institutions maintain a proper report of a person's credit history. Positive and long credit history affects a person's score positively and helps them to avail of a loan easily. Hence, it is a good practice to retain an unused or old credit card, even if a person does not require it.
Now that you know the factors that affect your credit score let us now see the ways to increase your credit score by 100 points.
If you find yourself scrolling the internet with questions like "how to get my credit score up by 100 points?" The following section will help you. You can practise these methods to boost your credit score:
It is very difficult to say the exact figure by which your credit score will boost following these methods. However, if you keep practising these healthy financial habits, you are bound to see positive results with time. Further, you should also plan and track your credit score regularly to know how your financial actions impact your credit score.
The main motive of a credit report or credit score is to help the lending partners decide if an applicant is worthy enough to opt for a credit or loan. Therefore, maintaining a good credit score is very important to obtain funds in times of financial crisis. In this regard, knowing how to improve your credit score by 100 points will ensure a smooth and hassle-free borrowing experience.
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