What are the Factors that Affect your Credit Score?

Several factors influence your credit score and understanding them can help you manage your credit health, potentially improving your eligibility for credit solutions from Shriram Finance.

Here are the key factors:

• Payment History: Timely payments on loans and credit cards demonstrate reliability and positively impact your score.
• Credit Utilisation Ratio: Maintaining a low credit card balance compared to your credit limit can enhance your credit score.
• Credit History Length: A longer credit history often results in a higher score, showcasing your credit management over time.
• Types of Credit: A mix of credit types, like loans and credit cards, can indicate responsible credit usage.
• New Credit Inquiries: Each hard inquiry for new credit can temporarily reduce your score, you must avoid too many inquiries in a short period.
• Outstanding Debt: High levels of outstanding debt can negatively affect your creditworthiness.
• Public Records: Bankruptcies, tax liens, and judgments can lower your credit score.

Late payments, collections, and defaults leave negative marks on your credit report. By being mindful of these factors and responsibly managing your credit, you can maintain a healthy credit score.