A credit score is the number that represents credit worthiness of an individual. Meaning, what are the chances of the borrower to default on the new loan that gets extended to him. These credit scores are generated through statistical assessment of the historical data available with the bureaus. The traditional lending process evaluates the borrowers’ request on two parameters. First the capability to pay and second willingness to repay. While the capability to pay gets assessed through the income documents.
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We all know that loans are an integral part of our lives and also that the performance on any credit product would impact the credit score. However, one may not even remotely have the idea that even a loan application can impact the score. If you actually check out on your bureau report you would find that the score has dipped by a few points post you applied for the loan.
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You must have probably heard from your friends and acquaintances that having a high credit score is really important if you want to get personal loans, credit cards, etc. easily. This is 100% true. However, what you may now know that a high score can make your life easier and more comfortable in many other ways. Some of these are:
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With the year drawing to a close rapidly, it is time once again to start setting new year resolutions for the year ahead. How about this year you make resolutions that will help you improve your credit health and your overall financial well being as a result? Here are five ideas of how you can go about improving your credit health in the ensuing year.
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As we near the beginning of the new year 2019, it’s a good time to reflect on the days spent in the year 2018. The decisions you made in the past and how they affected your life can teach you many valuable lessons. On that note, if you want to achieve a high credit score in 2019, then you can make it happen by just following these 6 steps:
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Are you one of those who like to be in the elite group of people? Do you like to show off your luxury wears and brag about how much you love to live a luxury life? What about your financial well being? Do you also show off your finances to others? What about your credit score? Where do you stand as far as credit score goes? Do you know how the banks and lenders look at you? No, heard this term for the first time? Do not worry; we are here to clear some air for you.
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There are a lot of things which determine if your behavior and we tend to work a lot towards it. An excellent behavior gives you respect in the society and is good for mental health. There are many other behaviors which are important but are not obvious to the naked eye. Let's take financial behavior here as an example, your financial behavior is really important for maintaining a good standard of living and also for your mental peace.
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The 3 digit number on a person's credit report called the credit score can have a 6 digit impact on their financial lives.
Freescoreindia provides people with the tools required to understand their credit profiles and unlock the power of their credit score.
By the virtue of being the first credit bureau in India, the credit scores colloquially are called CIBIL Score. The score given by any credit bureau is called credit score. There are four bureaus in India viz. Credit Information Bureau India Ltd (CIBIL), Equifax, Experian and Crif Highmark and all of them give out credit scores.
The bureaus in India rate an individual on a scale of 300 to 900. A credit score of 750 and above is deemed to be good and individuals in this score band will have faster access to funding. But a person with low credit score still may be able to get loans since the underwriting is based on various factors.
Your credit score shall not only impact the approval of loan that you apply, but also has the potential to influence the rate of interest beign charged. A lower rate of interest will result into huge savings. Therefore, it is highly important to be aware of the credit score.
Your credit report has primarily three sections. Personal information, details on all the loans and credit facilities that you would have taken and enquiries from lenders. Each of this broad information is critical to your access to credit and hence need to be looked at with care.
The credit bureaus assign credit score to an individual based on complex algorithms. Broadly, there are five factors that impact your credit score. They are:
One of the major reasons why one should check the credit reports regularly is a high error rate. As per a unique survey, one of four reports has errors. These errors can lead to severely impacting the credit score and diminishing the chances of access to loans at the time of need. To know more about the reasons why one should check score regularly read more from our blogs.
Unlike developed economies, where one has access to free credit score once in a year, people have to pay for the same in India. We at freescoreindia have resolved to extend free credit score for two reasons, first to bridge the disparity on availablity of free credit score and second to educate and spread awareness on this important aspect of every one’s financial life.
You can withdraw your credit report from any of the credit bureaus as many times as possible. This will not have any bearing on your credit score. However, the enquiries made by lenders can impact the credit score.
