zero credit score credit cards

If your credit is bad or 0 - 599, fair 600 - 649, average 650 - 699 or great 700 - 850 rand you want to build some more good credit, then you need to get one of these cards that I have hand picked for you below.

Remember you must have 3 - 6 credit cards, car loans, home loans, personal loans that are, current (paid on time and open now) and rated (at least 12 months payment activity reported to the bureaus). Pre Paid and Secured Visa Credit Cards with 500 600 700 750 800 900 1000 credit limits are the least expensive and easiest way to get the 3 - 6 accounts you need, to improve your credit scores. You may not even have to pre pay with a credit score of 600 - 649. Orchard Credit Cards are the most flexible of all credit cards for people rebuilding credit. Orchard will assess your credit and come up with the best plan for your and your situation.

  • The best credit cards with a 350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 373 374 375 376 377 3 78 379 380 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 398 399 fico score credit score. The best credit cards that will approve a 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 426 427 428 429 430 431 432 433 434 fico score credit scores 435 436 437 438 439 440 441 442 443 444 445 446 447 448 449 450 451 452 453 454 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 495 496 497 498 499 fico score credit score. The best credit cards to build credit with a 500 501 502 503 504 505 506 507 508 509 510 511 fico score credit score 12 513 514 515 516 517 518 519 520 521 522 523 524 525 526 527 528 529 530 531 532 534 535 536 537 538 539 540 541 542 543 544 545 546 547 548 549 fico score credit score. The best credit cards that with a 550 551 552 553 554 555 556 557 558 559 560 561 562 563 564 565 566 567 568 569 570 571 572 573 574 575 576 577 578 579 580 581 582 credit score 583 584 585 586 587 488 589 590 591 592 593 594 595 596 597 598 599 fico score credit score. The best credit cards to build credit with a 600 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 618 619 620 621 621 622 623 624 625 626 627 628 629 630 credit score 631 632 633 634 635 636 637 638 639 640 641 642 643 644 645 646 647 648 649 fico score credit score Cards for a 600 - 649 Score. The best credit cards to build credit with af 651 652 653 654 655 656 657 658 659 credit score 660 661 662 663 664 665 666 667 668 669 670 671 672 673 674 675 676 677 678 679 680 681 682 683 684 685 686 687 688 689 690 691 692 693 694 695 696 697 698 699 fico score credit score. The best credit cards to build credit with a 700 701 702 703 704 705 706 707 708 709 710 711 712 713 714 715 716 717 718 719 720 721 723 724 725 726 727 i have a credit score of 728 credit score 728 729 730 731 732 733 734 735 736 737 738 739 740 741 742 743 744 745 746 747 748 749 fico score credit score

What is a Credit report debt to credit ratio? What is a good balance to limit ratio on credit cards? 30% or 30 percent or thirty percent. No more than 79%. If your balance to limit ratio is higher than 79% your score will drop.


Credit Repair: How to Improve Your Credit Score

Zero credit score credit cards

Zero credit score credit cards

If you're strapped for cash and having trouble making ends meet, improving your credit score may be the last thing on your mind. Millions of Americans are suffering from dinged-up credit: the lingering result of the recession, the lack (until recently) of real increase in wages, the economy's sluggish growth. But a strong credit score is the backbone of an individual's financial health, and its importance goes beyond simply getting a low interest rate on a loan. A driver's credit score, for instance, is a major factor in pricing auto insurance.

Regardless of what has happened to you financially – whether you have gone through foreclosure or bankruptcy, gotten behind on credit card payments or racked up a lot of debt – it is possible to rebuild your credit. Here's how.

Understand How Your Credit Score Is Determined

Your credit score (often referred to as your FICO score) provides a snapshot of your credit status. It's determined by a variety of factors, and obviously, you need to understand the components that affect your credit score before you can start to repair it. Although the exact formula used by the Fair Isaac Corporation, which compiles the score, is proprietary and not publicly disclosed, here's basically what it looks at, and how each factor is weighed:

  • Payment history – 35% of your score. Do you have a history of paying on time? That's what will improve your score the fastest.
  • Amounts owed – 30% of your score. How much debt do you carry compared to how much you make? Reducing the amount you owe will also go a long way to improving your credit score.
  • Length of credit history – 15% of your score. The longer you've had credit, the better. A person who is younger will typically have a lower credit score than someone who is older, even when all other factors are the same.
  • New credit – 10% of your score. Each time you sign up for a new credit card or loan, your credit score will likely go down for at least a short time.
  • Types of credit used – 10% of your score. A good credit mix (credit cards, installment debts and long-term loans) will improve a credit score.

The FICO score isn't the only credit score creditors can base their decisions on; in fact, the three credit reporting agencies or credit bureaus – TransUnion, Equifax and Experian – have pulled together to create their own credit scoring model, called the VantageScore.

While FICO is used by more creditors to determine credit worthiness, being aware of your VantageScore and working to improve it can help you look your best should a creditor decide to use this algorithm instead of the FICO. It can also be used as an educational tool to see where your strengths and weakness are.

So, the first thing you should do is assess the damage by looking at a current credit report issued from one (or all) of the three major credit bureaus. Under the Fair and Accurate Credit Transactions Act, every American has the legal right to receive one free report from each one of the companies per year, which will save you some money on processing fees. You can get access to each one at the site annualcreditreport.com.

Check over your credit report with a fine-toothed comb: Verify that the amount you owe on each account is accurate. And look for any accounts you paid off that still show as outstanding. If something seems incorrect or you are not sure of any items, then it is your right to contact the credit agency in writing and ask them to investigate the issue and make an amendment. The Federal Trade Commission recommends sending your letter via certified mail and requesting a return receipt so you know the bureau received it. According to the FTC, companies typically must investigate disputes within 30 days of receiving a correction request.

Pay special attention to any recent inquiries that you did not authorize. Before a creditor approves you, or someone pretending to be you, for an account, they will make an inquiry which will be noted on your credit report. If there are inquiries that you did not authorize, notify the credit bureau immediately.

Credit reports typically have a space for you to provide your comments at the bottom: explaining why a particular debt hasn't been paid or to point out any factual errors. While this is another area of recourse, with the credit bureaus you're seen as guilty until proven innocent, and the burden's on you to correct things. When you write to the credit bureau, be sure to send copies (not the originals) of any proof that can be used.

Checking your credit report on a periodic basis, at least annually, is a good way to catch any instances where you might be the target of identity theft – or the credit bureau has accidentally mixed up your history with someone of a similar (it happens more than you'd think). If you are concerned about others accessing your credit report without your permission, you can freeze it, which will limit who can access the information and under what circumstances. If you think you are a victim of identity theft, contact your local law enforcement authority immediately.

There are several key things to examine in a credit report that will help you identify any problems:

  • Personal information – Make sure the names and addresses reported match your personal history. As noted above, sometimes the reports of people with the same or similar names get combined incorrectly; having your report tied to that of someone with bad credit can lower your score. To correct an error you need to document, in writing, what is wrong. This can be a quick fix if all the negative information belongs to someone other than you, but proving that may take some time.
  • Account Information – Carefully check all accounts listed and make sure they are actually accounts that you have opened. If you find an account in your name that you did not open, contact the credit bureaus, explain the fraud and ask that a fraud alert be put on your account. Then contact the card-issuing company to find out more details about the account. The fact that it is on your report means it is likely that someone used your Social Security number in opening that account. Also be sure that the balance information and payment history for each account is accurate. If any information is inaccurate, you will need proof of the correct information and you will have to start a dispute with the credit bureau to ask for ratifications.
  • Collections – If there are collections on your credit report, check to be sure there are not multiple reports of the same unpaid bills. Collection accounts are bought and sold, so the same information could be reported by more than one agency, which would make your credit history look worse than it is. Send documentation to prove the debt is listed more than once.
  • Public Records – Negative information from public records can include bankruptcies, civil judgments or foreclosures. Bankruptcies can be on the report for seven to 10 years, but all other public records must be removed after seven years. If the public record on your report is older than is allowed, dispute the information with the credit bureau and send documentation to prove that the debt is too old and should no longer be on the report.

Pay Early and Often (or at Least, On Time)

Once you know what you have to work with, make sure that all of your accounts are current, and up to date. Were you a little tardy paying that MasterCard bill last month? Well, this will go on your credit report and lower your credit rating. The longer and more often you do not make bill payments on time, the lower your credit rating will become. And many lenders won’t give credit to people with a history of recently missed payments on other credit accounts (with "recently" translating to two years back). Missing enough payments that your account is turned over to a collection agency is another sure way to tank your score, not to mention limiting your access to affordable credit – or make it cost more than it should.

Credit reports record your payment habits on all type of bills and credit extended, not just credit cards. And sometimes these items show up on one bureau's report, but not another's. Old, unpaid gym dues that only appear on one report could be affecting your score without you even realizing it. If you rent a house or apartment, some credit agencies count the history of those payments in their credit score calculations (assuming the landlord reports it to them). For example, credit rating giant Experian began including positive rental payment histories in its credit score ratings in 2010. TransUnion also figures positive rental payments into its credit calculations (look for it under “tradeline expense” on your credit report.)

Over one-third of your score depends on whether you pay your creditors on time. So, make sure you pay all your bills by their due dates, keep receipts, canceled checks or reference numbers to prove you did so. While utility and phone bills aren't normally figured into your credit score, they may appear on a credit report when they're delinquent, especially if the provider has sent your account to a collection agency and forwarded that information to the bureaus.

You don't have to pay your bill in full to have your payment count as on-time; you only have to pay the minimum (though that isn't there to do you any favors – it's there to keep you in debt: You'll be paying lots of interest, and paying off your balance for years). However, if it's all you can afford, you're better off making the minimum payment on time than not making a payment at all. The important thing to remember here is that a consistent history of on-time payments will cause your credit rating to rise.

Some folks swear by setting automatic payments using their bank’s online bill-paying system or their creditor’s automatic-payment system. If you prefer more control, at least sign up for automatic payment alerts from your lender, via email or text. Then set up a place in your house where you always pay bills, and get an accordion file that enables you to arrange the statements by due dates. Be sure to time your payment so the check or electronic funds transfer will arrive on time.

Not all debt is equal. Indeed, installment loans, like mortgage or education loans, is considered “good debt” because it presumably leads to something that improves your financial position (owning an asset like a house, getting a good job). That’s in contrast to unsecured debt – like credit cards.

“If you have to choose between debts to pay, skip the credit card bill because it's unsecured and a creditor can't repossess anything. Luckily, credit card delinquencies hurt credit scores less than bigger debts, such as home or auto loans,” says Sarah Davies, senior vice president of analytics, product management and research for VantageScore Solutions.

If you’re unable to pay all of your bills on time, “cushion the blow to your credit score by defaulting on just one account. There is a component in the FICO score called 'prevalence,'" says John Ulzheimer, president of consumer education at SmartCredit.com. "That means having five collections is worse than having one." He recommends that you “let the account with the highest monthly payment fall behind to free up more money every month to pay your other debt obligations.”

If you are facing financial difficulties, it's always best to contact your lenders, creditors or service providers (such as your utility company or physicians) as soon as possible. Collection agencies and legal fees cost lenders a lot of money, so they are often open to negotiations, which are free. Call, email or write to explain your financial situation (for example, if you have experienced a job loss or unexpected set of expenses due to medical emergency). Discuss a new payment plan and make a good faith payment. At the least, you might be allowed to skip a payment without penalty or lower your minimum payments.

Assuming unemployment isn't the issue, job stability is a good indicator to lenders that you will make good on your debts. If you have a spotty resume, make the choice to stay in your current position for at least a year or two to build lenders' confidence. Of course, don't hesitate to take a new job if it comes with a sizeable bump in salary.

After payment history, the next largest impact on your credit score (30%) is the amount of debt you have. For most people, the most controllable aspect of this is how you use your credit cards.

"Financial companies love profitable customers who run up their credit card balances, right? One might think," says Randy Padawer, vice president of credit services at LexingtonLaw. "But interestingly, that same industry penalizes consumer credit scores as a direct result. To ensure a good credit score, never max out your credit cards. For an even better score, keep balances as low as possible."

You need to show you can handle credit wisely, so having occasional balances on your credit cards can be a good thing. But in general, when you use your credit cards, try to pay them off as soon as you can (you don't have to wait for the statement in the mail but can pay online anytime). In fact, you can make your record look better than it is by making your payments just before your statement is sent, rather than waiting until you receive it. Most credit card companies report your balance at the same time that they mail your bill. If, for example, your statement goes out on the 15th of the month, pay your bill early (let’s say by the 13th) so the money will arrive prior to the statement being sent out. That way your outstanding credit balance reported to the credit bureaus will be lower.

When you have the extra cash to pay down your outstanding balances, focus on the cards that are closest to being maxed out, to benefit your credit score the most. Next, zero in the credit card balances that are higher than 50% of your credit limit. Borrowers who have used up more of their available credit are considered higher risk.

That being said, if those are the cards with the lowest interest rates, perhaps because you took advantage of a low APR balance-transfer offer, the savings you'll achieve from paying off your highest-interest-rate debt first may be more important than improving your credit score.

When one card is paid off, take the payment you were making to the paid-off card and add that to the next card.

The number of credit accounts you have open is also important to control. Credit cards are easy to get: Almost every store has a quick, convenient way to get you a new card. Attractive incentives, such as big discounts on purchases the day you sign up, add to the temptation. If you shop in that store often, it may be worth getting its card; otherwise, resist the urge.

It's not just that the new plastic can encourage you to spend. Having too many cards can hurt your credit score. Credit-lending institutions will look at the total amount of credit you have available to you. If you have 10 credit card accounts, and you have a $5,000 credit line in each account, then that will amount to a total of $50,000 in potential debt. Lenders will take a look at this potential debt load – as if you were to go out and max all your cards tomorrow – before considering how much they will lend you. They also worry about whether you will be able to meet your financial obligations.

What's more, each time you apply for credit, the potential lender will check your score. Each time your credit is checked, other potential lenders worry about the additional debt that you may be taking on. Sometimes, the act of opening a new account, or even applying for one, can lower your score; having lots of recent inquiries on your credit report dings your score temporarily. So don't apply for cards often, if you want to raise your score, and don’t constantly move your balance from card to card to get a special 0% APR. It will likely hurt your score more than it helps.

However, if you must have more plastic, applying for a secured credit card can be a safe way to go about improving your credit score. These are lines of credit that are secured with a deposit made by you, the cardholder. Usually, the deposit also acts as the credit limit on the secured card. While they come with high fees, high interest rates and low limits, these cards report your repayment history to the major credit bureaus each month, so as you make on-time payments, your credit score will improve – to the extent you won’t need the secured card anymore (they aren’t the most advantageous out there), or the card issuer will let you convert to a regular card (usually after 12 to 18 months).

You could also ask a trusted family member if you can be added as an authorized user on an account of theirs. You do not even necessarily need to use the card to improve your credit score.

A good idea would be to keep three to four credit card accounts open, but only use one or two of them; put away or cut up the others. Once you have paid off a card, though, keep the account open, even if you don’t want to use it anymore. Closing a card will lower your credit score, even if you always paid on time and never carried an outstanding balance. If a card's high annual fees are making it undesirable, try asking the credit card company for a downgrade to one of their free or lower-fee cards. This allows you to maintain a longer history with the company, which is important for a healthy credit score. The company will report to the credit bureau that you have a good record with them, which will increase your credit rating.

Closing out delinquent accounts or those with a history of late payments can also help, as long as you've paid them off in full. Because history is important, if you do decide to close a few more accounts, close the newest ones first. The length of your credit history is 15% of your score, so even after you've paid down your balances, keep your oldest cards open. Be sure use these cards to make occasional purchases (then pay the bills in full), so the card company won't close your account for inactivity.

While it seems to make sense to pay off all of your old delinquent debts, this strategy can sometimes backfire and drop your score further. If a credit account is simply overdue and shows as outstanding debt, paying it off will improve your score – though it won't eradicate the record of late payments. But if you have an old debt on your credit report that has been charged off by the lender – meaning that they do not expect further payments – setting up a new payment plan can re-activate the debt and make it appear to be more current than it actually is. This is often the case with debt that has been turned over to a collection agency. The agency may register the debt with credit bureaus as new rather than reporting it against the written-off debt.

As newer debt weighs more heavily on your credit report than older debt, your score can drop when you make an effort to pay, whether in part or in full. While the payment will make the debt show as settled in full, it may show on your report as new debt. Regardless of how it shows on your report, ensure that the lender removes the charged-off status on your old debt and shows it as paid in full.

If you choose to settle with a lender for less than the total owed, the arrangement will show on your credit report and may drop your score depending on how it is reported. Some lenders will simply mark it as paid, which has a positive affect on your score; however, if they show it as settled, your score may suffer. Although you can negotiate with a lender as to how they will report the settlement, you ultimately have no control over what they will do.

Carefully review older debt that shows as charged-off. Before contacting the creditor or collection agency, check your state laws to see if the debt is statute-barred or time-barred, meaning that it is too old for creditors to attempt further collection. If it is not statute-barred, even contacting the creditor can re-instate the debt as currently collectible, which can drop your score.

If the debt is due to drop off of your report in the next several months because it is almost seven years old, consider waiting until then to pay it, as it will have no affect on your score once it disappear. If the debt shows as written off but will still show on your credit report for longer than a few months, collect all of the funds together to completely pay it off before making contact with the lender. That way, you will potentially re-activate the debt but will also show payment in full, which will minimize the damage to your score.

There’s a way to boost your credit score that doesn’t involve paying down debt or any of the other more traditional score boosting tactics. Since credit scores are determined, in part, on the difference between your credit limit and the amount of credit you use, ask for a higher credit limit. Your chances of increasing it are likely better than you think. Of those who apply for a higher credit limit, 8 out of 10 are approved, according to a recent Bankrate Money Pulse Survey. While it helps to be over 30, odds are good for all adults. To avoid having your credit diminished by asking for a higher limit, ask for the highest credit line increase that won't trigger what's called a hard inquiry. (For more see Credit Score: Hard vs. Soft Inquiry.)

By increasing your credit limit, you automatically increase the spread between the amount you are allowed to borrow and the amount you actually do. The larger the spread, the higher your credit score.

This spread, known as the credit utilization ratio, is expressed as a percentage. For example, if the limit on your MasterCard is $5,000 and you have a balance of $4,000, your utilization ratio is 80%. If your limit goes up to $10,000, suddenly your utilization is just 40%.

Obviously, the higher the utilization percentage, the worse you look. Experts have long said that using 30% of your available credit is a good way to keep your credit score high. More recently, that recommendation has been reduced to 20%. In the $5,000 limit MasterCard example above, 30% utilization would represent a $1,500 balance. Boosting your credit limit from $5,000 to $10,000 would allow for a $3,000 balance and still maintain 30% utilization. (This, of course, is just an example: It’s not likely you would get a 100% increase in your credit line. But any amount will help increase the spread and lower the utilization ratio).

A third of your overall credit score is based on the credit utilization ratio across all of your cards. Because of the way credit scoring works, it's better to carry a $1,000 balance on a card with a $5,000 limit (20% credit utilization) than to carry a $500 balance on a card with a $1,000 limit (50% credit utilization). That's why, in discussing payment pecking order, we recommended paying off the cards closest to being maxed out. That's also why you shouldn't terminate accounts; it'll increase the percentage of total available credit that you’re using – and that will reduce your score.

The key to this strategy is obtaining more credit, but not using more credit. In other words, if your limit goes up $1,000, don’t go out and charge half of it. Think of the boost as a way to save money later when you apply for an auto loan, home loan or another form of long-term debt where a high credit score will likely result in big savings via a lower interest rate.

While you're at it, ask the credit card company if they could lower the APR on your card. With a lower interest rate, your pile of existing credit card debt won't grow as much every month, and you'll be able to pay down your balances faster.

If you are having troubles paying some of your bills in a timely fashion, then maybe debt consolidation is right for you. (See Digging Out Of Personal Debt.) But tread carefully: This a field ripe with scam artists who rebuild nothing but their own bank accounts. If you are approached with an offer of help to negotiate your debt, make sure that you receive a copy of the "Consumer Credit File Rights Under State and Federal Law" and a detailed contract for services including contact information, stated guarantees and an outline of fees and services before you provide any personal information or turn over any financially-related documents. Ask for references, do online research and keep copies of all paperwork and correspondence in case a dispute arises.

Rapid rescoring is a little-known strategy explained by credit guru Liz Pulliam Weston in her book, "Your Credit Score: Your Money and What's at Stake." Unlike credit repair services, which are almost always a scam, rapid rescoring is a legitimate way to improve your credit score in as little as a few hours – if there are verifiable inaccuracies on your credit report. For rapid rescoring to work, you must have proof that negative items on your credit report are incorrect.

Rapid rescoring is for people who are in the process of applying for a mortgage or other type of major loan and, because of their low credit scores, are being denied credit or offered a high interest rate. Individuals cannot initiate rapid rescoring on their own, but a lender can do it on their behalf. The rapid rescoring service works with credit bureaus to quickly remove incorrect negative information from your report.

If your credit score is pretty good, but not good enough to get you the interest rate you want, you may be able to improve it by taking out a small loan and repaying it as promised – in other words, by adding some positive activity to your credit history. Also, because installment loans add to your mix of credit, obtaining one might improve your score.

One option is to use a peer-to-peer service like LendingClub, which facilitates lending between individuals. The company reports borrowers' payment histories to credit bureaus. The minimum loan amount is $1,000 and you must have a credit score of at least 660 to apply.

Improving your credit score is a bit like losing weight: It takes a while. Unless there are major errors on your credit report that you can easily get erased, there is no quick fix. Often, it takes at least a couple years to go from a low score to a high one. But at least, you'll be improving your financial position, and building up good financial habits, in the interim.


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CIBIL or TransUnion CIBIL Limited is India’s oldest Credit Information Company (CIC). CIBIL is an acronym for Credit Information Bureau (India) Limited. Since its establishment the year 2000, CIBIL has been collecting and maintaining records of Indian residents with respect to their loans and credit cards provided by banks and NBFCs in the country. This information is used to generate CIBIL Credit Reports and calculate the credit scores for new loan as well as credit card applicants. This way, CIBIL plays a crucial role in India's financial and loan system. As per the latest records, CIBIL has 2600 members which include India's leading public and private sector banks, financial institutions, housing finance companies and non-banking companies. In 2017, CIBIL launched CIBIL MSME Rank to help lenders assess loan risk against micro, small and medium enterprises.

The CIBIL Score, also known as the CIBIL TransUnion Score, is a 3-digit whole number in the range of 300 to 900 that summarises how well or how poorly you have dealt with loans or credit cards in the past. The higher your CIBIL score, the better your chances of being approved for additional credit in the future.

Importance of CIBIL Credit Report

Recently, RBI has made it mandatory for banks and financial institutions to check CIBIL credit report and score of any individual in order to lend money. Credit report and score basically indicates an individual's financial stability and tells the lenders where that individual will be able to repay the loan on time. This score is calculated by credit bureau after collecting your credit information from member banks and credit institutions on regular intervals. CIBIL is one of the oldest and major credit bureau in India that generates a report along with 3 digit score (from 300 to 900) that defines the credit-worthiness of an individual. If you have been paying the credit bills and loan amount on time, then you will have a higher score. Higher score means that there are more chances of you to get a loan at a considerate interest rate. If you have a low score of say below 650, there are higher chances that your loan application will be rejected. For any individual, it is recommended to check CIBIL score in every 6 months to maintain or improve it, in case the score is low.

Consumer CIBIL Bureau vs Commercial CIBIL Bureau

CIBIL is a credit bureau that contains credit information about everyone. It basically has two segments. One is Consumer CIBIL Bureau, launched in 2004, which maintains the credit records of individuals from member banks and credit institutions. It has over 600 million records. Another is Commercial Bureau which maintains the credit information of non-individuals, which includes partnership firms, proprietary firms and public limited companies. It was launched in 2006 and currently maintains 32 million records.

A credit report is a document, which details your financial history with respect to all forms of credit. The key types of credit or borrowing instruments that form a part of the credit report include credit cards and all sorts of loans - personal loan, home loan, car loan, etc. to name a few. The important thing to note here is that such information is a historic representation, so in case you have never taken a loan or a credit card, your report, when generated will reflect the same.

As credit report only reflects how you have used credit instruments such as loans and credit cards in the past, you net worth plays no direct impact on how high or low your score would be. Thus your bank balance, annual salary, business turnover, investment in mutual funds, real estate holdings, amount of gold you own, etc. will not show up on your credit report and have no direct impact on your score. However, owning a large quantity of assets may have an indirect bearing on your ability to get loans in the future as you would be better placed to opt for secured loans using property, mutual funds or gold as collateral.

Key Information Contained in a Credit Report

Apart from the historic records pertaining to your borrowing instruments such as loans and credit cards, your credit report also includes the following key identity information:

  • Name
  • Date of birth
  • PAN Number
  • Aadhar Card
  • Additional Identity Information such as serial number of Driving License, Voter’s ID card, etc.
  • Your current and previous residential addresses
  • Your current and previous employers with address
  • Income tax information availed through previous IT filings
  • Dates on which your credit report was pulled by lenders to determine loan/credit card eligibility
  • Information related to overdraft facilities available with your banking accounts etc.
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Companies that Prepare Credit Reports in India

Zero credit score credit cardsIn India, these reports are prepared by companies known as credit reporting agencies or credit bureaus, who collect the borrower’s information from banks and NBFCs (non-banking financial companies) as well as various government agencies such as the Income Tax department. Three credit reporting agencies provide these reports in India - CRIF High Mark,Equifax, Experian and CIBIL TransUnion. Each of these companies have slightly different credit scoring models, hence the same individual’s credit score can vary in reports prepared by different agencies.

  • CIBIL TransUnion Credit Report: CIBIL stands for Credit Information Bureau (India) Ltd. and it was set up as India's first credit bureau. Currently, CIBIL has teamed up with TransUnion, a globally recognised credit rating and analytics company to provide CIBIL credit report to Indian individuals. Lenders who are registered members of CIBIL submit monthly reports to CIBIL regarding its borrowers and CIBIL TransUnion prepares its reports based on such information. CIBIL credit reports are not free and they are available in lieu of a fee, but it does have the facility of providing instant credit report online. Key Institutions that have holdings in CIBIL TransUnion include Bank of India, Indian Overseas Bank, Bank of India, ICICI Bank, India Alternatives Private Equity Fund, Aditya Birla Trustee Company Private Ltd., Union Bank of India, Bank of Baroda and Trans Union International Inc.
  • Experian Credit Report: Experian India is a completely owned subsidiary of Dublin, Ireland-based Experian LLC and operates as Experian Credit Information Company of India Private Limited. Experian’s credit reports include details of all your previous loans and credit cards, however, it uses its proprietary statistical algorithm to calculate your credit score hence the score provided by Experian would be different from that provided by CIBIL TransUnion and Equifax. Experian India does not currently provide free credit reports and you can get hold of yours for a specific fee. You can access your Experian credit report online as well as through mail, to check on your eligibility for loans and credit cards as well as to identify instances of identity theft. This credit bureau is still to provide instant credit reports. Some leading Indian financial institutions that have collaborated with Experian include Union Bank of India, Sundaram Finance, Punjab National Bank, Magna Finance, Federal Bank, Axis Bank and Indian Bank.
  • Equifax Credit Report: Equifax is an Alanta, US-based international organisation engaged in providing information solutions for the workforce, commercial and consumer segments. Equifax India operates as ECIS (Equifax Credit Information Services Private Limited), which is a collaboration of Equifax with leading financial institutions in India such as Union Bank of India, Sundaram Finance Limited, Religare Finvest Limited, Kotak Mahindra Prime Limited, Bank of India, Bank of Baroda and State Bank of India. The consumer credit bureau department of Equifax India has been operational since September, 2010 and you can get a copy of your free Equifax Credit Report through Paisabazaar.com.
  • CRIF High Mark Credit Report: CRIF High Mark is India’s only full service credit bureau which provide credit reports for Individuals across Retail, Agri and Microfinance lending, and Businesses. CRIF Credit Report includes a credit score in the range of 300-&00; details of all your current & previous loans and credit cards; and your personal details captured in the credit bureau. You can instantly access your CRIF Credit Score online for a specific fee. CRIF, included in FinTech 100, is among the leading providers of banking credit information in continental Europe. It is also among the key global players who specialize in business information, analytics, scoring, decision and credit management solutions. CRIF High Mark’s other investors include State Bank of India, Punjab National Bank, SIDBI, Edelweiss and Shriram City Union.
Zero credit score credit cards Customers with high credit score get cheaper interest rate on loans. FREE Credit Score

CIBIL report is basically a record of your credit history that is maintained and recorded by the credit bureau. This report along with the credit score is used by the money lenders and banks to know your credit worthiness. Usually, the credit report contains the following elements:

Credit Score: This 3 digit score, ranging from 300-900, plays the most important role in your loan process. This score determines the chances of you defaulting on your loan payment, based on your credit history. A score above 750 is considered good and increases the chances of your loan approval.

Personal Information: It contains information like name, date of birth, gender, PAN, passport number, driving license number along with your contact details.

Account Details: This section contains all the information of the loans and credit cards owned till date. Along with the details of the lenders, it also contains your account number, loan type, current loan balance, overdue amount, interest rate of each loan, etc. It also shows monthly record of payments.

Employment Details: It contains information of your job and income at the time of credit taken.

Enquiry: The last section of report has the name of the lenders that have enquired about you. If you have too many hard enquiries in a short span of time, then it will negatively impact your credit score.

The primary purpose of these reports is to help lenders such as banks and NBFCs determine the credit worthiness of loan/credit card applicants. Your report contains data regarding how closely you have followed the payment schedule of your previous/current loans and credit cards. In case of missed payments or past due payments, this information is also present in the report and related penalties are applied when calculating your credit score. The credit score itself is a 3 digit number, which is derived statistically by taking multiple parameters into account and as a rule of thumb, the closer you are closer to 900, the more credit worthy you are believed to be by the prospective lender. Conversely, the closer your score is to the 300 mark, the less credit worthy you are determined to be and the less the probability of your loan/credit card applications being sanctioned by a prospective lender.

However, prospective lenders are not the only people who have access to these reports. You can also access a copy of your own report. Using those, you can figure out your eligibility for loans and credit cards that you may be interested in. It is in fact recommended that you get a copy of your report at least once a year to ensure that the information in the document is up to date and correct. Errors in your credit report can cost you dearly as if it may lead to rejection of credit card/loan applications as well as availability of lesser loan amounts or high interest rates charged to loans and credit cards issued to you.

Improving and Maintaining Your Credit Score

If you have been rejected for a loan or credit card, there is a high probability that it happened because there is information in your credit card that marks you as a borrower with low credit worthiness. That’s the bad news. The good news is – it’s not the end world and with a small amount of effort you have an opportunity to improve your credit worthiness. For starters, any information featured on your report only stays there for a limited period usually five years or less. So any information beyond that period is replaced by the new information that you add. So start following the tricks and tips mentioned below to start laying the foundation of a good credit score and a blemish-free credit report in the future:

  • Ensure your pay your credit card bills and loan EMI on time and in full every month
  • Do not apply for multiple loans and credit cards simultaneously
  • Periodically check your report for mistakes and get them corrected if necessary
  • Keep your debt to credit limit ratio lower than 50% across all credit cards
  • Ensure that you do not have multiple outstanding unsecured loans/credit cards

Among the above, the main reason why many people have a low credit score is due to late payment of EMIs and credit cards, which is easily avoidable through a small amount of financial discipline. The other common reasons such as a high debt to credit limit ratio and multiple outstanding loans is usually as a result of lifestyle inflation and also avoidable through a small degree of financial planning.

As mentioned earlier, credit reports can be requested by individuals for themselves and in India, you can request reports from Equifax, Experian, CRIF High Mark or CIBIL TransUnion. In most cases, the turnaround time i.e. time duration between application submission and receipt of the report will vary as will the associated charges and the documents required. In simple terms, you can apply for a copy of these reports for yourself either online or offline.

In case of an online application you need to do the following:

  • Fill out the form provided online including name, DOB, PAN Card number etc.
  • Pay the required fees* through credit card/debit card or net banking.
  • Provide the answers to authentication tests if required (this is required to ensure your identity)
  • In case you fail to pass the authentication test, you have to upload digital copies of your documents to get hold of your report

In case of online reports, the credit bureau sends those out via password-protected email attachment to your registered email id and through speed post, courier sent to your home address within 7 to 10 working days.

*If you apply for a free online Equifax Credit Report by logging on to Paisabazaar.com.

In case you plan to apply through the offline route, you need to do the following:

  • Download and fill out the application form from the relevant website - Experian, Equifax or CIBIL.
  • Attach any and all self attested documents such as copies of PAN Card, Driving License, Electricity bill etc. as mentioned on the application form
  • Enclose a Demand Draft payable to the relevant authority for the required amount and mail it to the address mentioned on the website/application form.

In case of offline applications, you should receive your report within 10 working days by courier at the address mentioned by you on the application form. You can also check your application status online in the interim.

Difference between Credit Score, Credit Report and Credit Rating

Due to the interchangeable use of these closely related terms, there is often confusion between the terms credit score, credit report and credit rating. Following is a table comparing these three terms**:

A statistically generated three digit number that sums up your credit worthiness.

A historical record of the repayment schedules of all loans and credit cards of an individual.

This is applicable to companies, countries and various exchange traded funds. Credit rating acts as an equivalent of a credit score for these.

A high credit score (closer to 900) improves your chances of getting accepted for a loan and closer you are to 300 (low credit score) adversely affects you chances of successful approval for loans/credit cards.

A clean credit report leads to a good credit score and through historic data proves that the borrower has a good track record managing various debt instruments.

Credit rating is usually denoted by grades such as AAA, AA, B++ etc. A company rated as AAA would be able to raise funds at a much lower rate as compared to companies with lower ratings.

Changes depending upon the credit related behaviour of the individual.

An entry in your report stays on for around 5 years till it is replaced by newer entries.

Changes depending upon the performance of the industry, the market or the company/country/fund.

**The above table is indicative and the information provided is subject to change.

Similar to individual reports, a business credit report is also generated by various credit bureaus and these reports play a major role in determining the sanction of business loans. You can get a business credit report from CIBIL TransUnion, Experian or Equifax. Unfortunately, a free credit report is currently only available for individuals therefore you will have to pay a fee when you seek a business credit report. Additionally, business credit reports take a few more business days to be received as compared to an instant credit report available to individuals online for a fee.

Key Terms That Feature on Your Report

A credit report is analogous to a medical file and you need to well-versed with some key terms when reading this report that describes your financial health. The following are some must know terms that are key to understanding your paid or free credit report:

NA/NH : In case you do not have a credit card and have never taken a loan, this is what your credit score would look like. Otherwise, it could mean that you have no credit activity for the past 2 years or that you have no credit exposure as you use add-on cards that are linked to your spouse’s or parent's account.

STD : This entry is found against loan/credit card accounts if payments are made in a timely manner or made within 90 days of the due date.

SMA : An account classified as special mention account (SMA) if payments have been delayed loan/credit card for over 90 days.

SUB : This refers to substandard and a borrowing account is classified as such if it has been a non-performing asset for not less than a year.

DBT: An account is classified as DBT (doubtful) if the account has been in SUB status for 12 months.

LSS : Lenders tag a loan/credit card account as LSS signifying loss if an account remains uncollectible after having been previously tagged as DBT.

DPD : Days past due (DPD) is tag attached to an account and it indicates the number of days by which a scheduled payment was delayed for the account. Ideally this should show up as 000, meaning no late payments.

Written Off/Settled Status : This appears every report and in many cases the field is left blank. In case it is populated, it means that the lender and you came to an agreement after you were unable to make the regular payments on a loan/credit card. WO = Written off, Restructured Loan, Settled and Post (WO) Settled are the terms this field may be populated with.

The terms mentioned above are just a representative list and the list is by no means exhaustive.

Q1. How is my CIBIL Score calculated?

Your CIBIL Score is calculated using a complex statistical model, which is a proprietary business secret of TransUnion and CIBIL hence not available to the general public. The statistical model identifies multiple variables in your credit report in order to calculate credit scores.

Q2. Would my CIBIL score ever change?

Yes. Your CIBIL Score depends on multiple factors such as all current and previous loans/credit cards, payment history of credit instruments, number of outstanding loans/credit cards as well as your overall credit to debt ratio. A change in any of these factors can bring about a change in your CIBIL Score. Thus, little noticed factors such as missed payments and maxing out your credit cards as well as more noticeable factors such as a new home loan or car loan can lead to changes in your credit score.

Q3. Is CIBIL the only one who provides a CIBIL Score?

Yes. CIBIL Score is provided only by TransUnion CIBIL Limited and it is only one of 4 companies that provide credit scores and reports in India. Apart from CIBIL, three more credit reporting agencies are currently licensed to operate in India – Experian, Equifax and CRIF HighMark and they provide Experian Score, Equifax Score and CRIF HighMark Score respectively.

Q4. Is Credit Information Report same as CIBIL Score?

No. Your score is only a small part of your credit report, which is also known as the Credit Information Report. Apart from your score, your CIBIL report would also include details of various loans and credit cards that you have had over the past 5 to 7 years. Credit card/ loan details included in your credit report include credit limits, your repayment track record, the number of credit checks that have been made by prospective lenders in the past and a lot more. Just like a medical report, tells you about how you are doing physically, a credit report provides details about your financial health.

Q5. Can everyone access my CIBIL Score?

No. Your CIBIL Score is confidential personal information that only a few authorised entities apart from you are allowed to access and that too under specific circumstances such as when you apply for a new loan or credit card. Authorised persons who can access your CIBIL Score/Report include Financial Institutions and Banks who are CIBIL Members and they are legally required to NOT share any of your information with any unauthorised third party.

To dispel some of the common myths associated with credit score, please read “Top 4 Credit Score Myths Debunked”

Q6. How do I check my CIBIL Score?

You can get your CIBIL Report and score online by logging on to the CIBIL website and paying their fee (approx. Rs. 500). You are required to input some personal information like your PAN Number, etc. and answer some verification questions to prove your identity. Once all some details have been completed, your report will be prepared and displayed online as well as sent to your registered address as a printed copy if you request one. At present, CIBIL Report is NOT available for free from any company, however, you might get a discount in some cases if you apply for your CIBIL report through select CIBIL Member banks. The current rules are expected to change in 2017, and you may get your CIBIL report for free once a year upon requesting it.

Q7. How to check CIBIL Score Using PAN Card?

In India, your PAN (Permanent Account Number) acts as a unique identifier for various financial transactions and checking your CIBIL report and score is no different. So make sure you keep your PAN Card number handy in case you are applying for your credit report from CIBIL TransUnion.

Q8. How to check CIBIL Score for free?

You would find many websites offering this service however CIBIL Score is currently NOT available for free and the paid report is only available through the CIBIL TransUnion website. From 2017 onwards, you may be able to get your CIBIL Score for free as per a recent RBI circular.

Q9. How did CIBIL know about my loans and credit cards?

CIBIL works on a reciprocity principle i.e. CIBIL Members can access the records of CIBIL only if the members (Banks and NBFCs) provide CIBIL TransUnion with records of their borrowers. In this manner, all your loan and credit card information gets reported CIBIL by your existing lenders and these form the basis of your report and score. The same logic holds true for credit scores prepared by Experian, Equifax and CRIF HighMark.

Q10. Would checking my CIBIL Score cause it to decrease?

No. If you check your credit report or score, it is considered to be a “soft look” and this type of check does not affect your credit score in any way. This holds true no matter for any credit score not just your CIBIL score. You can check your Experian credit score for free through Paisabazaar.com.

Q11. Why do banks need to check my CIBIL Score?

Banks are businesses and they want to make money, so when granting a new loan or credit card, they want to be as sure as possible that the applicant will be able to pay it back. By accessing your credit report and score from CIBIL, Experian etc., the loan officer at the bank can make a more informed decision regarding whether you are a low risk borrower who has little chance of defaulting or a high risk borrower with a high risk of defaulting. Depending upon this analysis, your loan interest rate, loan quantum, credit limit for a new credit card, etc. are determined.

Q12. Why is a credit card account that I already paid off and closed still on my report?

Your current lenders report your loan/credit card status to CIBIL periodically and these details get reflected in your report over time. Therefore if you close out a loan or credit card account this month, it might be a couple of months before it gets reflected in your credit report. Other causes of such discrepancy may be a reporting error by the bank or NBFC that you took the loan or credit card from or you may be a victim of identity theft.

Q13. What happens if my CIBIL CIR has errors?

In case you find errors in your CIBIL CIR, you can apply to have those corrected by contacting CIBIL TransUnion directly and following their rectification procedure. As part of this process, you will be required to submit supporting documents (bank NOC, loan settlement letter, etc.) and also a nominal fee to get your records updated.

Q14. Can CIBIL delete or change my credit information on its own?

No. CIBIL does not have the authority to delete or make changes to your credit report on its own. They are only involved with collating the data as provided by banks and NBFCs. However, in cases of credit report disputes, CIBIL will make changes to your credit report provided there is sufficient documentary evidence to show that an error has indeed occurred. However, the concerned bank or NBFC will have to provide the necessary clearance before such changes are made.

Over the past few months, CIBIL TransUnion has been shifting to a new scoring model in order to be more relevant with changing customer credit data and profiles as well as current economic trends. This new scoring model has been termed as CIBIL 2.0. The main change is an assignment of risk index from 1 to 5 to individuals with relatively new credit history (less than 6 months). The higher the numeric value of the risk index, the lower the perceived risk of default.

Q16. Does CIBIL Score affect my chances of getting a new loan or credit card?

At present, your credit score whether reported by CIBIL, Experian, Equifax or CRIF HighMark, is one of the key factors that determine if you are eligible for a new credit product. Though different banks and NBFCs have different cut off criteria and these are not available to the general public, having a high credit score (closer to 900) definitely improves your chances of getting approved for additional credit.

Q17. How much CIBIL Score is good?

There is no clear data available at present regarding what is a good or high CIBIL score for getting loans or credit cards. As mentioned earlier, the CIBIL Score range is from 300 to 900, therefore the closer you are to 900, the better your chances of approval.

Q18. What is the minimum CIBIL Score required for personal loan?

Banks or NBFCs in India currently do not publish any clear data regarding what is the minimum CIBIL Score they require for granting a personal loan. However, they also do not grant a personal loan without CIBIL check. So be on the safe side and ensure you have a credit score as close to 900 as possible in order to maximise your chances of personal loan approval.

Q19. What is the minimum CIBIL Score for a home loan?

Because banks and NBFCs do not publish any data with respect to a minimum qualifying CIBIL Score for home loans, a higher CIBIL Score improves your chances of a successful home loan application.

Q20. How much credit score is required for a credit card?

Currently, you cannot get a credit card without CIBIL check no matter what your credit card agent tells you and having a high CIBIL score would definitely bolster your chances of a successful application. As of now, credit card issuers so not publish data regarding a minimum credit score for credit card, thus higher scores are better.

Q21. How do I increase/improve my CIBIL Score?

CIBIL Score is based on your credit history and it cannot be increased overnight no matter what a self-styled CIBIL Score improvement agency might tell you. It starts with paying your credit card dues and EMIs on time, while also requiring you to minimise your outstanding debt.

Q22. How many years does CIBIL keep record of defaulters?

At present CIBIL does not publish a specific “Defaulters9rsquo; List”, however, your loan/credit card default records though show up on your credit report. The details of such a default would show up on your CIBIL report for a maximum of 7 years.

Q23. CIBIL Bureau Customer Care

In case of any query, feedback or concern, one can contact CIBIL's consumer helpline number at +91-22-61404300, from Monday to Friday (10 am-6 pm). You can send them a fax at +91-22-66384666. You can send them an email at [email protected] for any complaints.

In case you are not satisfied with the received solution or response, you can escalate the issue to the senior management. This facility is available online at CIBIL’s official website.


Getting the Chase Sapphire Reserve credit card made my credit score go up by almost 40 points

I'm planning a family vacation to Hawaii for myself, my husband and our daughter for later this year. Although I'm typically not much of a travel hacker, my goal is to get the airfare and lodging to be as inexpensive as possible, which is what lead me to apply for the Chase Sapphire Reserve credit card.

This credit card offers a very large welcome bonus to eligible new cardholders (100,000 Chase Ultimate Rewards points after spending $4,000 on purchases with the card within the first three months after account opening). I wanted this card in particular because points are worth 50% more when redeemed for travel. In other words, if I spend the 100,000 points on travel, they will yield $1,500 in travel reward value.

I was fairly certain my application would be approved. I knew my credit score at the time was somewhere around 740 or 750, depending on the source. I know it could be even higher, but at this level I don't worry about it too much. I use credit cards for almost everything I buy and, although I'm not perfect — I do carry a balance now and then — most months I pay my credit card balances in full. I usually see high utilization reflected in my credit scores, though, because the balances are often reported before my payment due dates. But just like I expected, my card was approved. But what I didn't expect was what would happen to my credit scores.

RELATED: The most-hated credit card companies:

Zero credit score credit cards

The Thing That Sent My Credit Score Skyrocketing

I knew applying for a new credit card would knock a few points off my scores. What I didn't expect was the very high credit limit ($12,000) on my new Reserve card. The credit limits on my other cards range from $1,900 to $7,200.

I was quite suddenly within reach of the elite 800+ club, and the only significant change was my overall amount of available credit, and the lower utilization ratio that resulted.

Let's make sure that's plain as day. Lowering my credit utilization ratio to 12% caused my credit score to rise by 37 points.

One of the keys to excellent credit is having low utilization — meaning keeping your debt levels low in relation to your overall credit limit. Experts recommend keeping that rate at 30%, ideally 10%, of your overall credit limit. So, if you have a credit card with a $1,000 limit and you charge $900, your utilization would be reported as 90%. Bumping my credit limit up helped me improve my scores. But remember: Just because you have a higher limit doesn't mean you should be spending more, especially if you can't afford to pay off the balance in full.

What else impacts your credit? Using the free credit scores tool on Credit.com, I found out what other factors I had working for and against me.

On-Time Payments: 100% (excellent). No work to do here. I automate many payments, and use a bill pay app to help me make sure I maintain a good payment history (this accounts for 35% of your credit scores).

Oldest Credit Line: 12 years (good). My student loans from the '80s and '90s finally aged off, lowering my average file age. I'll need to hold on to my oldest accounts to improve this factor. Also, the average age of all of my accounts is just five years, pulled down by my new Chase account.

Utilization: 12% (good). To lower this, especially after holiday spending, I plan to focus on making my credit card payments by the statement closing date on each card. That way, the balance reported will be zero.

Recent Inquiries: 1 (good). This was the Chase card I recently applied for, and I know the inquiry counts against my score for one year (and ages off my credit report after two years). I'll avoid applying for new credit for the time being.

New Accounts: 2 (good to average). I recently refinanced my mortgage. The inquiry was more than six but less than 12 months ago.

Are you considering getting a new card? Well, first up, you'll want to see what your credit scores are so you have an idea of the types of cards you may qualify for.

Needless to say, so-called "elite" credit cards like the Chase Sapphire Reserve would likely not be available to me if I had a low credit score, as you typically need good or excellent credit to qualify for rewards credit cards. Because my credit is already healthy, I can take advantage of deals that are only available to consumers with good or excellent credit. In this case, a great credit score translates to being able to have the chance to secure $1,500 in travel perks.

Beyond that, you'll want to look at the details of any card you're considering. Is there an annual fee and, if so, would it fit into your budget? (The Chase Sapphire Reserve comes with a $450 annual fee, for example.) And think about your personal habits. Do you tend to carry a balance? If so, a rewards credit card may not be right for you, as you'll likely lose out any benefits of the card due to paying those interest charges.

As for that trip to Hawaii, I transferred my Ultimate Rewards points from two lower-tier Chase cards over to the Reserve account where they have more value. Once I get the welcome bonus, I'll have more than 200,000 points to shop with. Not enough for an all-expenses paid week vacation for three, but I've still got plenty more time to earn and save.

Note: It's important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.


Could Your Next Financial Decision Hurt Your Credit Score? This Tool Can Help You Find Out

Some of the links in this post are from our sponsors. We’re letting you know because it’s what Honest Abe would do. After all, he is on our favorite coin.

Check this out: If I unwisely take out a $12,000 loan for a new car, my credit score is estimated to go up by one point.

On the other hand, if I wisely transfer a $4,000 credit card balance to a lower-interest card, my score is estimated to drop by 70 points!

Those are two of the surprising results I got playing around with the free Credit Score Simulator from Credit Karma .

The online tool lets you check out a dozen different scenarios to see how they might affect your credit score before you make any decisions.

What Does the Credit Score Simulator Do?

“The Credit Score Simulator is an educational tool,” Credit Karma explains. “Explore, adjust and ponder, but just remember these are estimated outcomes and not predictions.”

You get an estimate of how many points you’ll gain or lose if you…

  • Get a new loan
  • Arrange a balance transfer
  • Get a credit denial
  • Open a new credit card account
  • Close a credit card account
  • Get a credit limit increase
  • Increase or decrease your balances
  • Have past-due accounts
  • Don’t pay your taxes
  • Have your wages garnished
  • Have a foreclosure
  • Have an account in collections

Since these are personalized results, you need to sign up for a free credit monitoring account with the company. In the years I’ve had my account, I’ve never had to pay a cent.

“It will show personalized offers to you based on your credit profile,” Credit Karma says , but you can just ignore the ads if you’re not interested.

To give you an idea of how the various factors might affect your credit score — and why — here are some of the results I got from the simulator. Estimates are based on each individual’s credit profile, though, so your results may be different than mine.

For example, a new loan might boost my score, but lower the score of someone who already has too much debt. And in all cases, of course, your real-life results might vary from the simulator’s estimates.

Here’s what happened when I tested these simulations.

I selected “auto loan” — you can also choose “mortgage” or “personal” — and entered $12,000.

This loan apparently would raise my score by a point because, “A new loan can add to your total accounts and allow you to build an on-time payment history over time.”

I entered a balance transfer of $4,000 and saw that my score would drop by 70 points because of a new “hard inquiry” on my credit report.

It also would lower the average age of the accounts on my credit history, assuming the transfer was to a new card.

I found this result shocking, but the simulator also reported these positive notes:

“1. You may decide, however, that the money you could save on interest outweighs the potential drop in your credit score.

With on-time payments, the negative effects usually wear off.

Your score may even benefit from the new credit card in the long term.”

The result could also be because I don’t normally carry balances from month to month, so I would be adding $4,000 to my debt load.

If you already owe that much and transfer it, your score may not be hurt so much.

Chase recently denied me a new card despite my over 800 FICO score.

When I asked why, they said the denial was because I’ve opened more than five accounts in the last two years. The credit score simulator says the denial will cost me six points due to the hard inquiry.

However, it also noted, “The negative effects of hard inquiries will usually fade after a year.”

To avoid this, check online for any reasons you might be denied a particular offer.

I’d seen Chase’s “five cards in two years rule” mentioned on at least one blog before I applied, and I had opened a dozen accounts in the prior two years.

Investigate before you apply, and you’ll save yourself a penalty.

A new credit card with an $8,000 credit limit won’t change my score at all, according to the simulator. In general, my score has only slightly bounced around with all of my new accounts.

Short-term drops from hard inquiries for new cards are probably offset by credit score increases from the resulting lower credit utilization ratio .

After all, unless you immediately run up the balance on a new card, a new credit line lowers the percentage of your total credit used (what the credit utilization ratio represents), which is good for your score.

Closing a credit card account may hurt your score if it significantly lowers your total credit limit, and raises your credit utilization ratio. Closing an old account can negatively impact your score because it will lower the average age of your credit history.

But the impact apparently isn’t that bad — closing my oldest credit card (14 years old) would only knock two points off my score , according to the simulator.

I entered a $5,000 increase for my credit limit and discovered my score would go up one point if the new limit was approved.

Many credit card issuers do a hard pull (hard inquiry on your credit report) when you ask for a limit increase. But, the negative effect of this may be offset by the positive effect of a lower credit utilization ratio achieved through a limit increase.

If you have several credit cards you may be able to avoid hard inquiries altogether. Just ask for the increase from credit card issuers who do a soft inquiry for a credit limit increase .

In general, lower credit balances are better for your credit score. I couldn’t test that on the simulator because I don’t carry balances — I pay in full every month.

But, if I increase my balance from the current $703 to $20,000, my score would drop by 41 points , according to the tool.

“Increasing the balances on your credit cards raises your credit card utilization rate and total debt, potentially negatively impacting your credit score,” the tool reports.

Unfortunately “past due” is not defined — is it three days late or more than 30?

Either way, my score will drop by 93 points if one of my card accounts is past due.

And, if all of my accounts are past due, I can expect my score to drop by 277 points ! Clearly, you do not want to make any late payments — ever.

My credit score will drop 24 points if I don’t pay my taxes.

Which taxes? It wasn’t specified, but the explanation goes like this, “A public record on your report, like a tax lien, will usually lower your score significantly.”

Surprisingly, a civil judgment that includes wage garnishment would only reduce my score by about 24 points.

“It could indicate to lenders that you’re a higher credit risk and will usually lower your credit score significantly,” the simulator said.

“Going into foreclosure is typically a strong indication that you’ve had trouble paying off your debts in the past,” the simulator says.

But surprisingly, a foreclosure only knocks 24 points off my score — and anyway, I don’t have a mortgage.

What happens if I have an account sent to collections? My score drops 187 points!

Once again, we see that paying your bills on time is the most important thing you can do to protect your credit score .

Planning to make one of these money moves in the near future? It might be worth taking a few minutes to play with the simulator and see how it will affect your credit score.

Your Turn: Have you seen big changes (positive or negative) to your credit score, and do you know what caused them?

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Steve Gillman is the author of “101 Weird Ways to Make Money” and creator of EveryWayToMakeMoney.com. He’s been a repo-man, walking stick carver, search engine evaluator, house flipper, tram driver, process server, mock juror and roulette croupier, but of more than 100 ways he has made money, writing is his favorite (so far).

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