How to be in the good books of credit rating providers? Check here 

Personal Finance 

A person’s credit score is an important factor in their financial health, and a drop in credit score can lead to higher interest rates, lower credit limits, and loan or credit application rejections.

Making timely payments, checking credit reports for errors, maintaining a low credit utilisation ratio, and other factors can improve one’s credit score.

The most important factor in determining a credit score is payment history, making up 35% of the FICO score calculation.

Missing payments, having a high credit utilization rate, and closing credit card accounts can all negatively impact a credit score.

Paying off installment debt, such as a mortgage or student loan, can also cause a credit score to drop due to loss of credit accounts.

A 100-point drop in credit score can mean being denied for loans and credit cards and facing higher interest rates on mortgages.

Low and high-risk consumers are treated differently in terms of credit score, with high-risk consumers suffering a more drastic drop for the same negative credit event.

Regularly monitoring one’s credit report is important to identify and address inaccuracies in a timely manner.

Negotiating with lenders and card issuers may result in lower interest rates and more flexible loan terms.