5 Reasons Why You Should Check Your Credit Report

09-Mar-2017 written by : FSI-Team

"Give me one reason on why I should not check my credit report", retorted Ashi. No matter what she said Sid was not willing to hear her. "Bah! What a waste of time and money it is. You give me one reason on why you should check your report?" countered Sid. "One? I will give you five”, replied Ashi calmly. Here is what she said:

To Spot Errors And Raise Disputes- Errors can completely wreck your credit and impair opportunities to seek credit in future. It is wholly and solely your responsibility to make sure that your report is in an impeccable condition.

For example, you have been paying all your dues in time but the bureau has goofed up, or the bank has goofed up and it hasn't been recorded then your score building plans simply go for a toss. Only if you check your CIBIL report regularly, you can identify the errors and have them corrected by raising a CIBIL dispute. A dispute helps you set the record straight and stay sorted.

To Prevent Identity Theft - Often such errors can manifest a case of identity theft. Yes, they do happen to real people. When you spot an account or enquiry of your credit report by a credit institution which you do not recognise, then it is very likely that someone has stolen your identity and taken loans on your behalf.

You don't want to be a victim of such a peril, do you? To avoid any such mishap, monitor your report regularly.

To Know About Your Credit Score - What if your applications for loans in future are rejected? It is a known fact that a poor score is one of the primary causes for rejection. Keeping a track of your score is an essential element of managing personal finances. Unless you know about your score how will your work on it?

You know you cannot get a loan for low CIBIL score. But a good credit score will not only enhance your chances of getting a loan, it also puts you in a stronger position to negotiate for better terms.

To Know If You Are Paying For Other's Mistakes - Picture this. You are an excellent borrower having a coveted score. A loved one hopes that you will guarantee their loan so that they can become eligible to borrow. You oblige. Now, you have been paying all your dues on time, as always and are not anxious about own score. But the person you stood guarantor for has been defaulting payments and hasn’t told you anything about it.

Remember, all your guaranteed and co-borrowed loans are as much your responsibility. In the lender's eyes, they are as much your liability as that of the primary borrower's. A credit check can be a real eye opener in such a scenario.

It's Free! - Most of all, it is free. Since January 2017, RBI has mandated all credit bureaus to provide all individuals with a copy of their free CIBIL report. This move was taken to encourage people to read and understand their own scores and credit reports.

Now Sid realised that checking your own report is not wastage of money. Rather it helps save money. He was convinced that when you know about your score and about the factors that impact it, only then you can control your score. You are the architect of your credit score.

Ashi turned to Sid and said, "So, what do you have to say now?" Sid just smiled.



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