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Credit Score

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62 views10 pages

Credit Score

Uploaded by

meghadigiya88
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Credit

Score Name : Kritika and

Ppt
Jyoti
Class : Bcom (Hons)
2
Content

1 3
What is
Credit Score 2 Importance of
Credit Score
4
Range of Calculation
Credit Score of Credit Score
What is Credit
Score?
• CREDIT SCORE IS BASICALLY A
NUMBERICAL EXPRESSION THAT
DEPICTS A CONSUMER'S
CREDITWORTHINESS.
• It estimates how likely someone is
capable to repay a loan and make
payment on time.
• Credit scores are used by many
companies to make decisions
about whether to offer credit,
interest rate and other terms.
• It typically ranges from 300 to 850
which are further categorized as
poor, average, good and excellent
1
RANGE OF CREDIT SCORE
Input Process Output

2
Importance of Credit
Score
• Required whenever someone applies for a
card, loan and mortgage.
• Important indicator of one's ability to repay
loans, to lenders.
• Helps to get more attractive insurance
options.
• Good credit score helps in getting the
grants without any much of a Hussle, since
it is assessed as a lower risk.
• LOW CREDIT SCORE = HIGH INTEREST RATE
• HIGH CREDIT SCORE = LOW INTEREST RATE

3
Calculation
of Credit score
It is calculated using various factors, which are
assigned specific weights and their collective
assessment determines an individual's
creditworthiness.

4
ELEMENTS USED IN
CALCULATION
1) PAYMENT HISTORY-Whether you have paid your credit accounts consistently. The more payment issue you
have, the lower your credit score will be.

2) AMOUNT OWNED-Amount you currently owe relative to credit you have. Percentage of available credit used
compared to your available credit limit should be below 30% to maintain a good credit score. A large total
amount of debt from many sources will have an adverse affect on your score.

5) LENGTH OF CREDIT-The longer your credit account have been open and in good standing the better. For
instance- lenders prefer someone who has never been late with payment in 10 years over a person with tenure
of one year.

4) NEW CREDIT-When people apply for credit frequently, it probably indicates financial pressures. So every
time you apply for credit, your score gets decreased a little.

5) CREDIT MIX-Lenders like to see a healthy credit mix that shows that you can successfuly manage different
types of credit.
5
Ways to Improve Credit
Check your credit Choose a longer Tenure
report Period
Customize your credit Maintain Credit
limit History
Pays Bill before Due Clear Existing
Date Debt
Improve credit Maintain your healthy credit
utilisation limit

6
Facts
• Generally, your credit score is
calculated and updated once per
month because lenders usually report
information monthly. It may be
updated more frequently depending
on your situation and lenders. Credit
scores are not fixed numbers.
• In India, credit scores are calculated
by four credit information companies
(CICs): Credit Information Bureau
(India) Limited (CIBIL), Experian,
Equifax, and Highmark

7
Bibliography
FOR SUCCESSFULLY COMPLETING MY PROJECT, I HAVE TAKEN HELP FROM THE
FOLLOWING WEBSITES:

• www.investopedia.com
• www.hdfc.com
• www.google.image.com
• www.youtube.com

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