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What Is A Perfect Credit Score?

IndianMoney.com Research Team | Posted On Friday, January 25,2019, 01:09 PM

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What Is A Perfect Credit Score?

 

 

About perfect credit score:

A credit score ranging from 750 to 900 is considered to be a perfect credit score. The closer your credit score is to 900, higher the chances of getting a good deal on loans. With a score in this range, the borrower is less likely to default on a loan. A good credit score can be achieved by repaying debts on time and managing finances responsibly. A credit score in this range gives you the power to negotiate better deals in terms of interest rates on credit cards and loans.

How Credit Scores Are Calculated?

The credit rating agencies in India are responsible for analyzing and calculating your credit score. A credit score is a numerical assessment of an individual’s capacity to manage debt. When a person make transactions like credit card repayment or payment of loan EMIs, the banks keep a track of them.

Then banks and other financial institutions submit repayment details to the credit bureaus on a monthly basis. The information submitted comprises of a list of all payments, details of approved/rejected applications for loans and credit cards, credit card limit and credit utilization ratio and the status of the credit accounts. The credit rating bureaus also collect additional data from other financial institutions on the financial habits of a person. The credit bureaus then process this information using complex algorithms and formulate the credit score.

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SEE ALSO: Credit Score Calculator

What Is a Perfect Credit Score?

Points to be considered when it comes to Your Credit Score:

The credit score is calculated based on the ability to manage and repay debt. A high credit score can make financial life easy. There are several factors that you must consider to maintain a good credit score:

  • Avoid multiple hard enquiries: Multiple credit enquiries can negatively impact credit score. Make sure not to apply for too many loans or at multiple banks. This will lead to multiple hard enquiries and can bring down your credit score.
  • Do not remove old accounts from your credit report: Old credit card accounts with a long repayment history show you to be prompt with repayments.
  • Mix of credit types: It is better to have a mix of secured and unsecured loans, as this suggests you can handle different types of credit.

SEE ALSO: 10 Credit Score Myths

Advantages of having Perfect Credit score:

A good credit score can sort out financial life and helps get loans and credit cards sanctioned quickly:

  • A good credit score means you are very responsible with personal finances and can manage debt or loans efficiently.
  • Having a good credit score helps secure loans easily and will qualify for best interest rates.
  • A good credit score helps avoid the rejection of loans and credit cards applications.
  • Banks consider you eligible for higher loan amounts as having a good credit score shows how responsible you are with payments.
  • A good credit score also places you in a position where you can negotiate better credit card rewards and interest rates on loans.
  • Banks offer top-up loans and other services on good credit score.

SEE ALSO: Tips To Improve Your Credit Score For A Home Loan

How one can achieve an Excellent Credit Score:

Getting an excellent credit score is not impossible. A perfect credit score is anything that is above 750 points. Listed below are few steps that will help increase credit score from good to excellent:

  • Check your credit report: it is important to keep track of credit report. Sometimes your credit score goes down due to incorrect information or misuse. So, it is important to check credit score regularly and get insights on your credit report. Check free credit score at IndianMoney.com.
  • Timely Payment of bills: In order to have an excellent credit score, make sure to pay your bills on time. Make sure not to default on loan EMIs or credit card dues.
  • Maintaining a good credit utilization ratio: Always try to maintain a good credit utilization ratio by keeping more than one account. If you are using credit cards do not exceed 50% of your credit utilization ratio. Avoid overspending on your credit card as it may impact credit score.
  • Maintain the credit score: Another point to be noted is that in spite of having a perfect credit score, it is important to maintain the credit score. The credit score changes each month depending on credit accounts. Therefore, it is best to always follow the above steps to maintain perfect credit score.

How to check free credit score report from IndianMoney.com:

 IndianMoney realizes how important it is to have a good credit score to pursue financial goals.  To help people check their credit score online and avoid hard enquiries, IndianMoney has tied up with Experian to check Credit Report and Credit Score for free. You can visit IndianMoney and follow the steps given below to check credit score for free.

  • Click on 'Get Free Credit Score now'
  • Fill in the details like Name, email address, gender, Date of birth, address, PAN card number and Mobile Number.
  • An OTP will be sent to your registered mobile number.
  • Enter the OTP and click on 'Get my Credit Report'
  • Credit report is displayed on your computer screen.

An individual is offered loans based on credit worthiness. Make sure to maintain a good credit score to get loans sanctioned easily. 

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