Credit report, credit score, Loans, credit cards and now very common words we all have been listening in a day to day life. There was a time when these all were the things that were not this common and not everyone knew about! With the accessibility of credits, one must know the basic of it. Credits may look a cake walk when applied for but it comes with a lot of responsibility. Repayment also looks easy initially, but other financial responsibilities one has to take, it is tough to stay regular in repayments, but not impossible!
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You applied for your first loan at the bank, and it got rejected. You are told that your credit score isn't high enough. So, you panic and become overwhelmed by the entire concept of credit score. Well, you needn’t worry as you aren’t the only one to face a problem like this. Hundreds of thousands of people across the country learn about credit score every next day.
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Understanding the credit report can be quiet intimidating. When one looks at the report for the first time, the terminology used in it seems to be written in an unknown language. The credit report has a gross impact on our financial objectives. Hence it becomes highly important to know the terms used in the report. Understanding these would make one aware about what the report means to him. After all, being aware and informed is what would lead to taking right decision.
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If you want personal loans and home loans at the best interest rates and through an easy process, then your credit score should be excellent. However, there are various things that can hurt your score too, one of which is poor credit management or overspending. But how does that work exactly? Let’s find out.
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People strive for financial success and do whatever it takes to be able to achieve their objectives on this front which is key for survival. However, credit score, which plays an important role in realizing the financial success does not get due consideration. While on one hand people will go to the extent of taking smallest of measures, like keeping off the electricity of unutilized rooms, they tend to neglect this big factor that can positively impact the aims set out on financial front.
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It might surprise you, but according to CIBIL records, 80% of the loans that are approved are for those who have a cibil score of 750 or above. So, if your score is lower, then this fact could be disheartening to you. However, does it mean that you can’t get a loan at all if you don’t have a score above 750? What if your score ranges between 500 to 550? Can you get a loan with this score? Let’s find out.
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Awareness about credit rating, the calculation process and its importance is still low in India, however now it is catching up. People are beginning to understand why it is important to be credit healthy and what can be done to improve one’s credit health. Thus it is very important that you look at your credit report from time to time and also understand it so that you are able to figure out what makes your credit score good or bad. Below we discuss simple ways that can help you in understanding your credit report better.
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Credit score has gained a lot of attention in last few years. The score which is a result of the complex algorithms run by the credit bureaus on the data available for an individual represents the credibility of the concerned person. In India the score ranges between 300 to 900.
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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.
