# Liquidations
### Liquidations
If a borrower's credit score falls to 500 or below, all borrow and withdraw actions are frozen on the Arcus app due to the risk of liquidation. Don't worry you can still repay your loans or supply more collateral to raise you credit score and avoid liquidation events.
If a borrower's credit score falls to 250 or below, indicating their loan is undercollateralized, an automated liquidation of all collateral and debt is triggered. At this time the deposited collateral comes under full control of the Arcus RLM and is liquidated. The collateral is than re-distributed to the Liquidator(s) and returned to the Lending Pools to make Lenders whole. This ensures bad debt is covered to protect lenders. Liquidation mechanics include partial and full immediate closeouts to minimize losses. The Liquidation fee rewarded to Arcus for liquidating the bad debt is set at 5% of the total liquidated value.
### **Credit Score**
Your ARCUS Credit Score is a calculation of the Loan-to-Value (LTV) ratio of your current loans. \
At a Credit Score of 500, the borrower's collateral funds are locked, and the borrower must repay the loan.\
At a Credit Score of 250, the borrower's collateral funds as well as any active loans and debt are liquidated.
{% tabs %}
{% tab title="Good Credit Score" %}
{% endtab %}
{% tab title="Ok Credit Score" %}
{% endtab %}
{% tab title="Bad Credit Score" %}
{% endtab %}
{% endtabs %}
If your collateral **increases in value** and all else stays the same, your Credit Score would increase!\
If your debt balance **decreases in value** and all else stays the same, your Credit Score would increase!
If your collateral **decreases in value** and all else stays the same, your Credit Score would go down.\
If your debt balance **increases in value** and all else stays the same, your Credit Score would go down.
**Ensure your Credit Score remains above 750 (3:1) at all times, to ensure safety of funds in times of market volatility.**
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