Credit score

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Your credit score is an important parameter when you apply for a loan or credit card. The score determines your creditworthiness and helps the lender assess the repayment risk of the credit lent to you. The score ranges between 300 and 900 and the higher the score that you have the better would be your chances of availing loans and credits easily.
Since the credit score is important, you should regularly check your score and try and improve it. You can calculate and check your free credit score online and you should use this facility to keep yourself updated about your score. If you have a low credit score, you can easily improve it before applying for credit. Here are the top five ways which you can use to improve your credit score easily

Credit score is a three-digit numeric score which measures your creditworthiness. The credit score is calculated by authorized credit bureaus and you can get free credit scores when you check credit score online. The score ranges from 300 to 900. This score is given importance when you apply for loans or avail a credit card. The score tells the lender how creditworthy you are. It helps assess lenders the risk of repayment default. A high credit score, which is between 700 and 900, is a favourable score which allows you to avail loans easily and at good interest rates. However, scores lower than 700 are considered to be low and you might face difficulties when applying for loans.

Loans and credit cards allow you funds on credit which you pay back over a period of time. Unless the debt is completely repaid, the lender faces the possibility of default in repayments if you stop repaying your debt. This default is bad for the lender as it incurs a financial loss. Thus, before granting you credit, lenders check your credit score. The credit score measures your creditworthiness and tells the lenders the likelihood of repayment default. If the score is low, you would not be allowed credit. That is why it is imperative you maintain a good credit score if you want to apply for loans of any kind.

Why is having a good credit score so important? Whenever you apply for a loan or a credit card your credit score is given importance. If you match the minimum credit score requirement of the lender,...