How can we increase your credit score?
Our credit score When applying for a loan, banks pay attention to individuals’ or companies’ credit score. Also known as a credit rating, the credit score is determined by evaluating individuals’ financial relationships with financial institutions and their financial reliability. So, what can be done to keep the credit score high? In which cases does the credit score drop? Comparison website encazip.com’s founder and savings expert Çağada Kırım provided recommendations to help maintain a high credit score.
When we want to buy a house or a car, or when there is an urgent need, we can apply for loans. However, the amount and interest rate of loans that can be obtained vary from person to person. The reason for this is the credit score. Also known as a credit rating, the credit score is determined by evaluating individuals’ financial relationships with financial institutions and their financial reliability. You can check your credit score from the platform created by the Credit Registration Office (KKB) in 2014, called Findeks. Additionally, all financial institutions can also see the credit score.
How can we increase your credit score? Delays in debt payments lower the credit score
Delays in debt payments lower the credit score
There are four main factors in credit score calculation, and the credit score is determined accordingly. “Repayment habit” is effective in 45% of it. As it can be understood from the percentage, repayment habit is the most important factor. Making payments on time and regularly raises the credit score. Delaying the repayment of debts or defaulting on them lowers the credit score. 32% of it looks at “current financial accounts and debt situations”. How previously used credits were closed and ongoing credits or collaterals are taken into account to make calculations within the limits. “Credit usage intensity” constitutes 18% of it. The credit score of those who use credit more frequently increases, while that of those who use it less decreases. “Newly acquired credits” make up 5% of it. If you have recently taken a loan around the time you calculated your credit score, it can cause your credit score to drop.
The credit score determined by Findeks, a subsidiary of the Credit Registration Office (KKB), which is owned by nine major banks, is calculated between 1 and 1900. 1 is the lowest score, while 1900 is set as the highest score. According to Findeks, if your credit score is between 1 and 699, it is considered ‘very risky’, between 700 and 1099 as ‘moderately risky’, between 1100 and 1499 as ‘low risk’, between 1500 and 1699 as ‘good’, and between 1700 and 1900 as ‘very good’. In order to use any type of borrowing from banks, you need to have a minimum credit score of 1100. The ideal credit score is 1500 points and above. If you are not on the blacklist, you can increase your credit score by making regular debt payments within a period of 1-6 months.
“The most important factor in increasing the credit score is paying off the debts. Therefore, in order to increase your credit score, it is important to make sure that debt payments are made on time.”
