CHECK YOUR FREE CREDIT SCORE

Is it Possible to get perfect Credit Score Of 900?

28-Nov-2018 written by : FSI-Team

Is it Possible to get perfect Credit Score Of 900?

As the famous saying goes, "nothing is perfect under this sun". When it comes to the credit score, it means that one would never be able to attain the perfect score of 900, if the saying was to be believed. While attaining perfection on the credit profile still may be doubtful, but one can definitely get to a point where the scores will be perfect for him.

Meaning that a score where the individual will not only be able to have access to the credit facilities at the time he needs but will also be offered preferential pricing and fee. Goes without saying that even lending institutions are business houses and would not want to lose a customer who has displayed a good credit behavior.

Following are the points that if one follows, will aid the quest to achieve the perfect score for himself.

Understand what impacts the credit score

The credit score is an outcome of the following five factors.

  1. Payment history The payment history carries a weightage of 35% and is indisputably has the highest impact on the CIBIL score. What it takes into account is the historic discipline of the individual on the credit obligations. Meaning, how the person has fared on keeping up with repayment of his EMIs and dues on credit cards.
  2. Accounts owed The number of accounts owed by the individual historically have a weightage of 30% on the credit score calculation. The current exposure is what it is made of. Higher exposure would lead to decline in the score.
  3. Length of credit history A longer credit history is a definite plus on this critical evaluation. It carries a weightage of 15% in calculation. A person who has been enjoying the debt for a longer period would stand a chance to gain. So one should not close on the oldest credit card.
  4. Credit mix The types of loans that the person has had would have an impact of 10%. Secured, unsecured and revolving are three kinds of credit and an exposure to all three is a definite advantage.
  5. New credit Every time a person exposes himself to new credit, the chances of slight drop in the score is highly probable. Even the number of inquiries made by the borrower have an impact on the score. It again carries a weightage of 10%.

Repayment to be done in time and in full

As observed above, the repayment carries the highest weightage and has the potential to swing the score either ways. One must not take the repayment for granted. Even a day's delay can be detrimental in getting closer to that perfect score. One must ensure that the account is funded adequately before the due date. As far the cards go, while the full payment may not have an impact, but paying the amount completely is always advised to be the best strategy by the credit experts. Please note that a lower score will lead to you getting charged a higher interest, including home loan interest rate, which is a secured loan with lowest default rate.

Beware of swiping the credit card

Credit cards are rightly believed to the main culprit in negatively impacting the score if not managed properly. And if managed correctly, they can act as a fried of that perfect score that one would dream to achieve. Do not swipe the card just because the limit is available. One should try to restrict the card limit usage to 30%. A higher usage does have a negative impact since it adds to the amounts owed or to say the exposure on outstanding.

Check the score regularly

This is something that carries high importance. Checking of credit score at regular intervals will only facilitate management and maintenance of credit score. In case one finds that there is a dip, corrective actions can be taken.


AROUND THE WORLD

STAY CONNECTED!

Don't miss a bit of Credit News
Join the FSI Force