When you decide to take any kind of loan or line of credit, you will come across the term "credit report". Every credit report is one of the primary components that every financial institution considers when deciding whether to approve or deny a loan. When you apply for a particular kind of loan, the loan providers check ‘’my credit score’’ report before offering approval or denial. It is important to know everything in detail about the Experian credit report. If you are planning to take out a high-value loan anytime soon, it is essential for you to maintain a good credit report.
What is a credit report?
A credit report is a detailed summary of your entire financial and credit history. It takes into account all your transactions, credit activities, credit accounts, and transactions that are taking place. It is very important to maintain a good credit report if you are looking for an affordable high-value loan. By checking the credit report, the loan provider is able to determine whether you are a responsible borrower or not. Every minor financial detail and transaction about a particular individual is stated clearly in the credit report. If you have missed any payments or delayed any credit card bills, all of these are included in the credit report. On the basis of the credit report performance, the three-digit credit score is given to individuals. Learn How to calculate business loan by using business loan calculator.
What are the components of a credit report?
● Payments are an important component of the credit report. It takes around 25% of the entire credit score to count. It plays an important role in determining whether you have a good credit score or not. Therefore, you should always keep a clean track record by making timely payments. Whether you are paying your monthly instalment of existing loans or credit card bills, you need to make the payment by the due date.
● Credit accounts also take around 10% of the entire credit score percentage. Active credit accounts like existing loans and credit cards impact your credit report.
● Credit mix is an important factor in your credit report. It is highly recommended that you saturate your credit profile with both unsecured and secured kinds of loans.
● The credit utilisation ratio takes around 25% of the entire credit score. If you exhaust 100% of the credit limit available to you, it will immediately damage your credit score. Must Read : Safeguarding your credit profile in the New Year 2022
● The number of credit applications that you apply for plays a vital role in determining your credit report and credit score.
Wrapping up
When you check your Experian credit score, it not only helps you track the improvement but also detects errors. Visit Clix Capital and find the option to "check my credit score" to get your score online.
