Your creditors and credit card firms add information to your credit report. This data consists of all of your credit account information, both active and inactive, as well as the most recent account closures. The credit rating agencies in India use the information in your credit report to create your credit score, a three-digit number that indicates your creditworthiness. You must obtain a copy of your credit report and regularly review it in order to check free credit score every month.
The following are the top reasons to routinely request a copy of your credit report:
Access to your credit report online
When determining whether or not a consumer is creditworthy, credit ratings are one of the key factors taken into account by lenders and significant credit rating organizations in India. As a result, regularly monitoring your experian credit score will give you a trustworthy picture of your creditworthiness and the opportunity to take the required steps to either maintain or improve it. As a result, you won’t be turned down for credit cards or loans in the future.
Verify for clerical errors
Credit bureaus will create your credit report using the data provided by your lender and/or the business that issued your credit card. Your credit report can include faulty information because the lender or credit bureau entered the data incorrectly. These details may have a negative effect on your credit score and, consequently, your ability to obtain credit cards and loans in the future. The impact can be seen when you check free credit score next time.
Consequently, the only method to determine whether this data is false is to obtain a copy of your credit report and review it for inaccuracies.
Find instances of identity theft
Identity theft happens when someone fraudulently conducts financial transactions in another person’s name using that person’s personal information. The identity thieves can apply for a credit card or loan in someone else’s name using information they wrongfully got. You can detect any fraudulent credit transactions or requests by routinely obtaining a copy of your credit report, which contains all of the credit-related activity and inquiries.
Don’t pose too many challenging queries
When you apply for a loan or credit card, the lender or credit card issuer will want a copy of your credit bureau record so they can assess your loan application. This happens each time you apply for a loan or a credit card. These “hard inquiries” are carried out by the lender to gather credit history. Your experian credit score will be reduced by a few points for each of these challenging inquiries. Have your credit history reviewed by the best credit rating companies in India before submitting a loan application. This will give you a good indication of your loan eligibility based on your credit score. With the help of this information, you may carefully examine your loan applications and take the necessary steps to maintain or raise your credit score.
Considerations to make while buying a credit report
There are currently four reliable credit rating companies in India, and they all have a unique method for determining creditworthiness. The same person will thus have various credit ratings from each of these bureaus. Therefore, you should at least once a year ask for a copy of your credit report from each of the main credit bureaus to remain updated and not be shocked to suddenly check free credit score someday.
You may also receive a free copy of your credit report and regular updates to that report by visiting online financial marketplaces. These markets will also inform you of the loans and credit cards that you are eligible for based on your credit score. You will be informed of any changes to your experian credit score through their monthly updates, which can assist you in developing the required financial discipline to increase or maintain your credit score.
What information in my credit report needs to be carefully examined?
Consider paying close attention to the following crucial elements as you examine your credit report:
Maintaining the accuracy of credit records
On a credit report, the credit bureaus list both hard and soft inquiries. If you find an unauthorized hard inquiry on your credit report, you should report it to the credit bureau so that it can be fixed. If someone you don’t know approaches you and asks you a question, be wary of identity theft.
Information about a credit account
Your credit report contains a list of all of your open and recently closed loans and credit cards. Verify that the report contains all accounts and the corresponding payments and that no new or extra accounts have been added.
You can determine whether or not invoices were paid on time by looking at the borrower’s repayment history as recorded in a credit report. Lenders carefully review this data to determine how borrowers have paid in the past and will pay in the future. In order to make the necessary modifications, you must thus get in touch with your lender and the bureau if any of this information is inaccurate.
Information about identity
Your name, PAN, mobile number, and mailing address are just a few of the personally identifiable information in your credit report. Make sure you are speaking each word clearly.
credit usage ratio
This much of your total credit limit has been consumed by you. Lenders frequently offer preference to borrowers who have used less than 30% of their available credit when they apply for a loan. This is because it is believed that those who utilize more than 30% of their credit limit are credit hoarders who are more likely to default on future loans.
Now that you have understood what all can go wrong if you just leave your credit score and report unchecked, ensure to make it a bit to not just diligently pay your card and loans timely but also keep a tab on your report every month. As soon as you see any issue, quickly have it resolved before it does any significant financial damage.