The Hidden Secret of Credit Score: What is CUR and How to Control It?
Loan Score is important in case of loan. Loan Score is a measure of reliability, on the basis of which banks decide whether to lend money to the applicant for loan or not. If the loan score is bad, then there is a lot of trouble in getting a loan and even if it is available, the interest rate is very high. Several factors are taken into account while calculating the loan score.
Loan payment history is considered first in this. Whether you have taken any loan before or not, have you paid the EMI on time. Loan payment history has a significant impact on your credit score. But apart from this, there are many other factors that affect the credit score, and one of them is CUR or Credit Utilization Ratio. Let us tell you what it is.
What is CUR
Credit Utilization Ratio (CUR) means the percentage of your credit card limit that you use in a month. The higher the percentage of the amount you use, the higher your CUR will be. For example, if your credit card has a total credit limit of 100,000 rupees, but you have spent 50,000 rupees from it, then your credit utilization ratio will be 50%.
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How does CUR affect the credit score
Credit utilization ratio should not be more than 30%. If your credit utilization ratio remains more than 30% continuously, then it sends a message to the bank that your dependence on credit card is high. This can damage your credit score. On the other hand, if you spend keeping in mind this limit of 30% and pay on time, then your credit score is much better from this.
