Applying for a credit card? Know what factors affect credit score

Applying for a credit card? Know what factors affect credit score

Is your credit score affected if you take a new credit card or apply for it? These questions are in everyone's mind. A credit score is a 3-digit number that explains the individual's credibility in banks and other financial institutions. If the credit score is high, the likelihood of getting a loan or credit card increases. Banks do not like to give loans or credit cards to people with low scores, as they feel that the customer will not be able to make a payment back. Now learn in which cases applying for a new credit card can harm your credit score.

Opening a new credit card account may reduce the average age of all your accounts. In fact, your credit age score is fifteen percent. It really measures the experience you've used. In addition, there are 2 major factors in your credit age—first, the age of your oldest account and the second average age of all your accounts. If you have multiple accounts and have a long history, then a new credit card application will impact.

To impact your credit score or CIBIL score when you apply for a new credit card, "If you have one or more credit cards, it will negatively affect your credit score. For instance, if your salary is 50 thousand rupees a month, and you have taken four credit cards, it will affect your CIBIL score.''

Loans like credit cards, personal loans are unsecured loans. It will have a negative impact if someone already has a credit card, and it won't negatively impact if you're taking the first or second card. Having more credit cards means you are making more credit scores. If the credit limit is more than the monthly income, it will have a wrong effect. One to two credit cards is enough, not more than that.

If you liked this story, you must share it. Stay connected to read other similar News and credit card articles from Paisabulls.

Read also: SBI changed the withdrawal rules: How much charge to be paid on a failed transaction

What is Ayushman Bharat Yojana and benefits of it: Know here

HTC making a comeback in the smartphone market with Desire 20 Pro: Know specifications, price, and features

Image credit: cnbc

Subscribe to Newsletter