A credit score is in number form based on a level analysis of a person’s credit files. Credit scores represent the creditworthiness of an individual. You can calculate your free credit score here. A credit score is primarily based on a credit report. A credit report is a document, which is a piece of collected information from credit bureaus. What is credit? A credit is a trust which allows one party to provide money to another party. The second party does not reimburse the first party immediately but generating a debt. The first party promises to pay every debt to the second part. The higher your credit score, the lower your risk of default.
Different types of Credit scores are:
Let’s take a look at different credit scores and what criteria they used to make your credit score. After seeing their way, you can able to calculate free credit score and can improve your credit health.
American credit score used:
The FICO credit score: The FICO credit score is the one who is the longest standing and most widely recognized. It is the credit score most likely used by the lenders. There can even be variations of the FICO score, including a FICO score from each of the three major credit bureaus, as well as variations on the FICO score depending on the purpose of your loan. The ranges go from alphabets A-F and numbers start from 300.
FICO score: 300-850
Experian score: 330-830
Equifax score: 300-850
TransUnion score: 300-850
Vantage score: 501-990
These are the range of credit scores that we can tell and compare credit scores. By comparing we can improve our credit scores. The range from 300-629 is a bad credit score. The range starts from 630 to 689 is comparatively a fair one. The good credit score starts from 690 to 719. An excellent credit score starts from 720 to 850. The range starts from 300.
Why credit scores differs from each other?
There are several reasons your credit scores may vary. The first is the source. Each of the major credit bureaus maintains its records on your credit profile. These records can vary from credit bureau to credit bureau.
Credit score used in India:
1) TransUnion CIBIL
4) CRIF Highmark
TransUnion CIBIL: This is established in 2000. All credit bureau in India offers a credit score between 300 to 900. 900 being the highest. A credit which is 700 and above is called ideal. The cost of the report and score is Rs. 550.
Equifax: The license granted in 2010. The cost of the report and score is Rs. 400 excluding GST. The range is the same as the CIBIL, that is, 300 to 900. 900 being the highest.
Experian: This is established in 2006 but license granted in 2010. The cost of the report and score is Rs. 399.
CRIF Highmark: The license granted in 2010. The cost and the range of scores are the same as Experian.
This credit score is a person’s file that is represent the creditworthiness of an individual.