Consider these 9 things before investing in mutual funds!
What is the right way to invest in mutual funds? How do mutual funds work? What kind of risk is involved? Which fund is right for whom? What things should be kept in mind before investing? Watch this video to know-
Credit score is the most important factor while one applies for a loan or for a credit card. One must have a decent credit score, i.e. more than 720 or 730 to get a low interest rate for the loan and to easily get credit cards. The best way of understanding one’s credit eligibility and position is to check the credit report and credit score frequently. There are mainly three entities operating in this domain in India— CIBIL, Experian and Equifax. You can check your credit score once every year.
But checking one’s credit score always incurs a cost. However, a major fintech company has extended this facility free to its customers. Anyone can check his/her respective score through this app, absolutely free of cost.
Free credit score
The largest fintech company Paytm has extended this offer to its subscribers. To check the score, one has to login to the Paytm app and tap on ‘My Paytm’. There one can find ‘All services’.
When you enter ‘All services’ section, there is a section called ‘loan and credit card’, where you can find ‘check free credit score’ option.
Select ‘free credit score’ in this section and put PAN (if not linked) and your name and date of birth (if required). If you are a new user, you will receive an OTP for verification of your profile.
Otherwise, you will get your credit score within couple of seconds. Even you can check all your loan account and credit card’s current status.
Paytm has extended this feature with the help of credit agency, Equifax.
Decode credit score
A credit score is a measure of an individual’s ability to pay back a loan amount. It is the numerical representation of their creditworthiness.
A credit score is a three-digit number that falls in the range between 300 (the lowest) and 900 (the highest).
While computing credit score, several factors such as length of credit history, repayment records, credit inquiries etc. are taken into account.
A score above 620-630 is fair. But to get a loan quickly sanctioned at low interest rate or get a credit card quickly, the score must be between 720 and 900.
How is it calculated?
Generally, credit agencies calculate the score depending on multiple criteria of the applicant. There are five main factors evaluated when calculating a credit score. They are – payment history, the total amount owed, length of credit history and types of credit and issuance of new credit.
Payment history contributes 35% of a credit score and shows whether a person meets repayment obligations on time. The total amount owed counts for 30% and the length of credit history has a 15% contribution to calculate the score.
The last two factors have 10% weightage each to calculate the total score of a person.