Globally, your credit score holds more relevance than you would imagine – it can be the deciding factor between your being able to rent an apartment or a house, getting a new phone connection, determining the premium you would pay on your insurance policy and in some instances, even getting a job. Closer back home, in India, credit scores are currently used predominantly in the banking and financial services (BFSI) sector, with lenders (banks as well as other financial institutions) evaluating your score before agreeing to extend a fresh line of credit to a borrower.Learn more
Vivek applied for a home loan, there was a lucrative festival offer by a builder which he did not want to miss. However he was surprised when his loan application was rejected due to a poor credit score and consequently he missed the home deal.Learn more
Remember the revered year 2002? It was then that incoming calls to mobile phones were made free revolutionising the Indian telecom industry. Making incoming calls free was like a drop in the water as its ripple effects brought a boom in the segment. Soon, every person, no matter what economic strata, was carrying a cell phone. The time has come to make scores available for free and revolutionize the credit world.Learn more
So what is behind a great credit score, anyway? What is it that you must do if you want to be in that much-admired league of individuals with a score of 800 and above? For starters then, let us try to understand why so many myths abound with regards to credit scores in the first place, which will help us segregate fact from fiction so that we can work towards ensuring a good credit scoreLearn more
Indians have a history of shying away from declaring bankruptcy or insolvency simply because of the social stigma attached to it. There have been cases where individuals have preferred to commit suicide rather than declaring that they have gone bankrupt because of huge loss in business, a personal tragedy or an accident that has left them handicapped. For such individuals there may be help in the horizon with the new Insolvency and Bankruptcy Code that was unveiled by the Government in May 2016.Learn more
As kids we all wanted to excel in our exams and show off our good scores in our report cards. Our teachers and parents always encouraged us to do better and aim higher. As a result we were made to pay attention to the littlest of details and keep a check on our own actions at all times. Who knew that it would actually serve as a foundation for a self monitoring and disciplined life? Apply all these learnings to finances and you will be all set on the right track.Learn more
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.