Micro Score Calculator

Micro Score Calculator

Your Micro Score: 0 / 100

function calculateMicroScore() { var income = parseFloat(document.getElementById('monthlyIncome').value); var expenses = parseFloat(document.getElementById('monthlyExpenses').value); var debt = parseFloat(document.getElementById('currentDebt').value); var stability = parseFloat(document.getElementById('stabilityYears').value); var history = parseFloat(document.getElementById('historyRating').value); if (isNaN(income) || isNaN(expenses) || isNaN(debt) || isNaN(stability)) { alert("Please fill in all numerical fields accurately."); return; } // 1. Net Cash Flow Factor (40% Weight) var cashFlow = income – expenses; var cashFlowRatio = income > 0 ? (cashFlow / income) : 0; var score1 = Math.min(Math.max(cashFlowRatio * 100, 0), 100) * 0.40; // 2. Debt-to-Income Factor (30% Weight) // Lower debt relative to monthly income is better var dti = income > 0 ? (debt / (income * 12)) : 1; var score2 = 0; if (dti < 0.1) score2 = 30; else if (dti < 0.3) score2 = 20; else if (dti = 80) { resultWrapper.style.backgroundColor = '#d4edda'; interpretation.innerText = "Excellent Credit Profile"; interpretation.style.color = '#155724'; description.innerText = "You exhibit high financial stability and a strong capacity for micro-credit repayment."; } else if (finalScore >= 60) { resultWrapper.style.backgroundColor = '#fff3cd'; interpretation.innerText = "Good Credit Profile"; interpretation.style.color = '#856404'; description.innerText = "You have a solid financial foundation with moderate leverage. Likely to be approved for standard micro-loans."; } else if (finalScore >= 40) { resultWrapper.style.backgroundColor = '#e2e3e5'; interpretation.innerText = "Fair Credit Profile"; interpretation.style.color = '#383d41'; description.innerText = "Consider reducing monthly expenses or outstanding debt to improve your score before applying."; } else { resultWrapper.style.backgroundColor = '#f8d7da'; interpretation.innerText = "High Risk Profile"; interpretation.style.color = '#721c24'; description.innerText = "Your current financial indicators suggest a high risk level. Focus on increasing net cash flow."; } }

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What is a Micro Score?

A Micro Score is a specialized metric used primarily in the microfinance and peer-to-peer lending sectors to evaluate the creditworthiness of individuals or small businesses who may lack traditional credit histories. Unlike a standard FICO score that relies heavily on historical bank credit, the Micro Score analyzes real-time financial health indicators such as cash flow, debt-to-income ratios, and employment stability.

How the Micro Score is Calculated

Our calculator uses a multi-factor weighted algorithm to generate a score between 0 and 100:

• Net Cash Flow (40%): This is the most critical factor. It measures how much money remains after all monthly expenses are paid. A higher surplus indicates a greater capacity to handle new debt payments.
• Debt-to-Income (DTI) Ratio (30%): This evaluates your total outstanding debt against your annual earning potential. Micro-lenders prefer seeing lower leverage.
• Stability (15%): Longevity in your current job or business suggests reliability. Generally, 3+ years in the same field significantly boosts your score.
• Payment History (15%): Even without a formal credit score, your history of paying utilities, rent, or previous micro-loans is a strong indicator of future behavior.

Interpreting Your Results

Once you calculate your score, it is categorized into four tiers:

Score Range	Category	Implication
80 – 100	Excellent	Highest probability of loan approval and low interest rates.
60 – 79	Good	Strong candidate for most micro-finance products.
40 – 59	Fair	May require collateral or a co-signer for approval.
Below 40	Poor/High Risk	High likelihood of rejection; financial restructuring recommended.

Tips to Improve Your Micro Score

If your score is lower than desired, consider the following actions:

1. Reduce Variable Expenses: Even small reductions in monthly spending immediately improve your Net Cash Flow.
2. Consolidate Debt: Pay off smaller high-interest debts to lower your total outstanding debt balance.
3. Document Your Income: Keep clear records of all income streams, as visibility into your earnings reduces the perceived risk for lenders.