ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Your payment history accounts for 35% of your score. This shows whether you make payments on time, how often you miss payments, how many days past the due date you pay your bills, and how recently payments have been missed.

Detailed explanation-2: -Payment history (35%) The first thing any lender wants to know is whether you’ve paid past credit accounts on time. This helps a lender figure out the amount of risk it will take on when extending credit. This is the most important factor in a FICO Score.

Detailed explanation-3: -Since credit utilization makes up 30 percent of your credit score, it’s a good idea to keep your available credit as high as possible-and your debts as low as possible. Running up high balances on your credit cards raises your credit utilization ratio and can lower your credit score.

Detailed explanation-4: -If you have credit cards, keeping a low balance-to-limit ratio (a.k.a. credit utilization ratio) might help you earn and keep a better credit score. Credit utilization is largely responsible for 30% of your FICO Score.

Detailed explanation-5: -Payment history shows how you’ve paid your accounts over the length of your credit. This evidence of repayment is the primary reason why payment history makes up 35% of your score and is a major factor in its calculation.