How to calculate credit-scoring
There are 4 major factors on which your credit score is calculated, such as your repayment history, utilisation of credit facilities, concentration of higher unsecured loans and inquiries made at various lenders for credit facilities (Home loans, personal loans, credit card loans etc )
Your payment history has a significant impact on your score. If your repayment tracks on all existing loans are regular, you would be awarded higher marks . If you have missed or delayed repayments on any of your existing loans, over the last two years, your score is likely to be much less.
If you are using credit card, overdraft facilities etc., diligently and making payments regularly without keeping higher outstanding amounts, your score would be higher.
Indiscipline in utilising credit facilities and higher utilisation of credit facilities will lead to much lesser score.
In your loan history, if you have more secured loans such as home loan and auto loan, which are normally need based, it is favourable for getting higher score.
On the other hand, if you have more unsecured loans such as personal loan, consumer loan and credit card loans, it is likely that you would get much lesser score.
If you have approached many lenders for various credit facilities in the past 2-3 years, whether you have availed yourself of those facilities, or such applications were rejected or pending, , such information leads to negative scoring. Lending institutions like scoring above 450.
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