Finsocre - Understand how it differentiates from Credit Score
It's likely that you're familiar with the concept of a credit score and its impact on your financial situation, loan eligibility, and creditworthiness.
However, are you aware of FinScore? It's important not to confuse FinScore with your credit score, as they have significant differences. So, let's delve into what FinScore is all about and how it differs from your credit score.
What is FinScore?
FinScore is an online platform which help you asses the health of your Finances in just few minutes. By keeping a tab on your financial health, you can plan and manage your finances more effectively and reach your Financial goals on time. FinScore calculates your score based on 15 sets of parameters, to give you a score that reflects the state of your finances. Additionally, FinScore can help you identify areas where you require immediate action and areas where you are already doing good.
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How credit score differs from FinScore?
A credit score measures your creditworthiness, i.e your ability to repay debts, loans, and other forms of credit.
While a FinScore is the overall health of your finances It will tell you whether you are doing well financially based on your goals and future planning.
For example, if you are 30 years old with a goal to buy a house at age of 35 and retire at the age of 55.
Your FinScore will take the input of monthly income and expenses. From the input you provided, FinScore will tell you how well you are doing financially and how much closer you are to attaining your goal by giving you a score.
Based on your score, FinScore will tell you what it means to be at a particular score. Assuming that your FinScore would be between 421 to 540, it indicates that your finances are decent but there is scope for improvement. While a FinScore beyond 780, suggests that you have excellent finances, on your path to achieving your goals.
FinScore generates a report based on your score. The report will help you understand the key areas where improvement would be essential. Based on that report, our financial planners will help you create customized solutions based on the requirements.
What is a credit score?
A credit score is a number between 300-900 determined by lenders and financial institutions. The number denotes a person’s creditworthiness and his ability to repay debts, loans, and other forms of credit.
Currently, 4 bodies prepare the credit score of an individual:
- TransUnion CBIL
- CRIF Highmark
An individual’s credit score is calculated by the algorithm, taking the following factors into account:
- Payment history
- Credit duration
- Credit mix
- Credit utilization
FinScore enables you to keep a track of your finances. It will help you develop a holistic approach toward your finances.
Getting your FinScore checked is the first step you can take toward financial freedom. Check your FinScore now on our website.