17-Mar-2018 written by : FSI-Team
Do you know exactly how important your credit score is in your life? Although on the surface it's the score of your creditworthiness, in reality, it's much more than that.
A lot of people fail to realize that their credit score follows them through their entire life. Most of them don't even check the score at all.
If you don't know how what your score is exactly, or if it's been a long time since you checked it the last time, then the following are some of the biggest reasons to check it once again today:
Identity thefts and frauds are increasing by the day in India. Cybercriminals are coming up with advanced malware and phishing attacks to steal your online banking information and personal information. However, a lot of times you find out that you have been attacked only when it's too late. This can be avoided if you check your credit report because that way you can identify any unfamiliar transactions made from your account or some other anomalies, etc.
A lot of times you have a bad score even when you are not at fault. This happens when there are discrepancies in a credit report. However, unless you check your score and the report, you can never find out about it.
If you want to improve CIBIL score, then you absolutely have to check your report. Only then you can find out the problems that led to a poor score and then work on those to make an improvement.
If you have a poor score, and you have applied for a personal loan, home loan, etc. then not only your application can be rejected easily, it can hurt your score even more. This is because when you apply for a loan, the lender initiates an enquiry for your CIBIL report. Since these enquiries are bad for your score, it's important that you apply for loans only when your score is good. For instance, your CIBIL score should be at least 750.
If you check your credit score and find that it's quite high, then you can use this knowledge to get a better interest rate for the loan you want. You can negotiate with the lender by letting them know you have a high score.
As per the new RBI norms, all the credit rating agencies must offer a free credit report to every individual once per year. So, when you don't even have to pay for the report, what's stopping you to get it?
If you are interested in a career in the banking sector or the insurance sector, then you will be surprised to know that many companies and institutions in these areas have started considering the credit score of the job applicants. So, it's another big reason to keep an eye on yours.
No one expects anything bad happening to them. However, life is unpredictable, and so you want to make sure that if one day you need a large sum of money on an urgent basis, then your CIBIL score is high enough to help you get a loan as soon as possible. That said, it's easy to increase score if you check your report every month, or at least every few months.
A lot of competitive insurance providers have started checking the credit score of their customers when calculating the premiums for their insurance products. So, if you want an affordable insurance premium, it's important that you check your score first.
If you recently became a loan guarantor for a friend or even a family member, then it means that their repayment history will affect your credit report. In other words, if they delay loan EMIs or even worse- default, then your own score could be damaged. So, as a precautionary measure, you must keep a close watch on your score.