A credit score is a three-digit number that falls within a range of 300 to 900.

Based on what factors credit scores are evaluated?

1) Payment History: (IMPACT – High)
It includes all your past and present loan payments, reflecting your reliability as a borrower. Unpaid debts can negatively impact your payment history and overall score.

2) Credit Utilization Ratio CUR: (IMPACT – High)
The percentage of available credit being used, usually on a credit card. 
For example, if you have a credit limit of Rs 5 lakh on your credit card, of which you spend Rs 50,000, your CUR would be 10%, i.e. Rs 50,000/Rs 5 lakh. A low CUR of up to 30% indicates good credit management and can improve your credit score.

3) Credit History Age: (IMPACT – Medium) 
The age of your credit history refers to the duration you have been utilizing credit. A longer credit history is good for your credit score.

4) Credit Mix: (IMPACT – Low) 
Borrowers may possess different credit accounts, including education loans, mortgages, credit cards, and vehicle loans. This assortment of credit accounts is known as the credit mix. This determines how well a borrower can manage all kinds of credit.

5) Credit Enquiries: (IMPACT – Low)
Credit Enquiries are typically necessary when an individual seeks a loan or applies for a credit card. A lender enquires (Hard Pull) to access a credit report for the borrower. More Enquiries in a specific duration give a desperate signal which affects your score.

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