Every creditor has its own definition about the good and bad credit. With the increasing number of financial institutions, they are keeping their credit standards very high. Thus, it is very essential for everyone to understand the importance of having a good credit.

Maintaining financial security on your own:

Maintaining a good financial reputation is in your hands. A careful awareness of your credit score is the first step that you can take for your financial security. People are increasingly dependent upon Loans for every small to a major purchase. So it has become very necessary for maintaining his credit score.

What is Credit Score?

Credit Score is the rating based upon the credit worthiness of the debtor. The evaluation is done by the credit agency CIBIL to analyze the repaying capacity of the borrower and the chances of default. It is the score that follows a person throughout his life in his financial decisions.

What is the difference between Credit score and the Credit report?

It is mandatory to have detailed understanding about what is mentioned in the fine print of the report. There is a huge distinction between a credit report and the credit score.

• Credit Report is actually the detailed history that contains credit information, balance, payments, bankruptcies and other inquiries.

• Credit Score is a 3 digit number that is made by taking into account your history, repayment capacity and instances of default. It is measured on a scale of 300 to 900 points.

If you have a credit score close to 900, you are eligible for Applying a Personal Loan or any other loan at affordable rates.

A credit score close to 300 and below 600 indicates some default in the past.

Monitor the Credit score regularly:

A consumer must monitor his credit even when you are not making any credit borrowings in the past. This helps a person in protecting his assets against identity thefts to qualify for a loan application.

Factors that are considered by credit agencies in determining the credit score of the borrower.

 Trends going according to Credit Score:

While purchasing Vehicle Insurance, credit score plays an important role in determining the insurance premium.  With the help of good credit score, one can easily manage to qualify for a discount in premiums.

Today Employers are checking the credit score of their employees to determine the responsibility and the trust of the employee.

Various utility companies like electricity phone and cable also check your credit score.

While closing a loan, it is important for a person to get a NO Due certificate from the CIBIL department. Due to bad credit all of the important aspects like owning the car and house and any other major purchase will get affected.

Credit Score is a direction towards a larger objective of bringing about the change in the industry and towards a growing economy; apart from just individuals interests.

Credit Score is the largest measure taken to bring out the change in the financial industry and to grow the economy.