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Credit Scoring – Know It to Tap Its Benefits

Shamim Yousfani
October 14, 2022


E-commerce is in its booming phase across the globe and with various functions in the sector rapidly digitalizing, the importance of your ‘credit score’ is bound to increase. So, it is important to know your credit score and how you can increase it to benefit from the rewards it entails. And for that, you have landed at the right place – read on to find out all about the concept of ‘credit scoring’.

What is a Credit Score?

A credit score is a numerical value that defines your credibility as an e-commerce customer. It is a number that tells e-commerce businesses whether you are a trustworthy buyer when shopping via credit/debit cards or requesting cash-on-delivery for an order. It also reflects your reliability to lending parties.

Why is your Credit Score Important?

Based on your credit score, a lending party like a bank offering credit card service or a ‘Buy Now, Pay Later’ platform, makes certain financial decisions for your case. The first thing they decide is whether you are eligible for being lent any money. Secondly, how much money should be lent to you is also decided based on your credit score. Moreover, the interest rate applied to the amount lent to you is decided according to your credit score, as well. All of these are some major financial factors which depend on your credit score, making it very important for you. A higher credit score would not only make you eligible for availing credit from different lending parties, but would also mean that you can borrow bigger amounts at lower interest rates.

How is your Credit Score calculated?

Your credit score is calculated based on three major factors:

- Payment History:

this factor has the biggest impact on your credit score. It investigates whether you have been paying your dues on time in the past. A good repayment history significantly adds to your credit score.

- Credit Utilization:

this factor also has a highly significant impact on your credit score. It takes into account how much credit you have borrowed so far and how much of that amount you have utilized.

- Length of Credit History:

this factor investigates how long you have been borrowing credit for, that you have been paying back timely. A longer, timely payment history suggests that you tend to repay in the future as well, increasing your credit score.

Other than these three major factors, the ‘type of credit’ – whether you have a variety of BNPL installments, car loans, house loans, card credit – counts in determining your credit score, too. The number of new accounts you have applied for recently can also impact your credit score to some extent.

How can you increase your Credit Score?

Now that you know how important your credit score is and even how it is calculated, you might want to use the latter information to work on improving your credit score to utilize all the benefits that a higher credit score can bring you financially.

Here are some ways you can achieve a higher credit score:

- Timely Repayments:

the first and most obvious way is to maintain a good repayment history. You can do this by ensuring you never have any outstanding dues and always make your payments timely.  

- Frequent Utilization:

regularly utilizing credit also adds to a good track record as a trustworthy customer, increasing your credit score and reflecting your tendency to pay back credit to lending parties.

- Regular Usage:

being a frequent shopper paying via verified credit/debit cards and receiving cash-on-delivery orders timely can also improve your credit score, alongside applying for loans and installments.

With that, you are now aware of all the basics of credit scoring, which is going to help you in maintaining a good credit score and reaping its rewards.

QisstPay Credit Score

QisstPay is now introducing its very own Credit Score for you. Being a part of the QisstFam for a while, and being a loyal customer throughout helps you achieve a higher credit score. If you have been a regular shopper with our merchants, have a timely repayment history on your ‘Buy Now, Pay Later’ orders, and frequently choose to pay with your credit/debit card – QisstPay has these rewards lined up for you against an excellent credit score:

• higher BNPL approval rate

• increased BNPL lending limit

• credit lines at our upcoming partner lenders and banks

• exclusive discounts at our merchants in the future

Download or update your QisstPay app now to access your Credit Score that will be available soon. Keep shopping at QisstPay stores to continue increasing your credit score and unlocking exciting new rewards!

Shamim Yousfani

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