A Free CIBIL Report May not be as Useful as You Think

19-Apr-2017 written by : FSI-Team

Monitoring your credit score is extremely important to ensure that your creditworthiness stays intact. And to make that possible your credit report or CIBIL report can be of great help.

There are a number of websites that offer free credit report. However, are these reports good enough? Well, it depends.

Most free credit reports offered by unaffiliated websites contain basic credit related information. Plus, they are not accurate.

These websites use the credit history details provided by you to calculate an estimate credit score using a formula that is not necessarily being used by the actual credit bureau itself. Thus, if you want your actual credit score you must get it from the official website of the credit bureau. In fact, you can get a free credit report from every credit bureau once every year according to the new RBI guidelines. So, that is a good idea, right? After all, you can get a free credit report, an actual creditable report for free! Unfortunately, that's not really helpful.

Why free credit reports may not be as useful as you may think?

Let's say Rahul is worried as he is facing some health problems. He decides to get a blood test to find what's wrong with his body. In a few days, he gets his blood test report. But what would he make out of that report? After all, it basically contains the details of haemoglobin levels, RBC and WBC count, etc. This information is useless to him. What he needs is a certified doctor who can analysis the report and put things into perspective. Only the doctor can tell what's wrong with his health and what the measures he need to take to improve his condition.

The analogy above is applicable to free credit reports too. So, while it is true that you can get free CIBIL report and check your CIBIL rating online, the information will not mean much to you. To make matters worse, these credit reports are not that simple to understand. There are all kinds of terminologies such write-offs, DPDs (Days past Due), ACs (Asset Clarifications) that you need to wrap your head around.

Even if you are able to decipher the actual status of your creditworthiness through the credit report you still need to figure out what you can do to improve it. This is the hardest part as it can take months to improve credit score. Many people who try their own methods for improving their score end up causing even more damage instead. For instance, they might start spending too much credit in an effort to speed up the process, when in reality it deceases their score due to a high credit utilization ratio. Similarly, closing old accounts that have a history of timely payments can also be detrimental to their CIBIL score.

What's the Solution?

There is nothing wrong with check your own free CIBIL report online. However, if you really want to improve your score at minimum and also learn how you can keep it that way, then the best solution is to get in touch with someone who knows about credit management and improvement. Such person will be able to properly guide you what to do and what not to do on the basis of your credit report.

There is no "one size fits all" solution to increase credit score. Everyone's credit history is different, which is why they need tailored solutions. Thus, by taking help from a credit expert you can ensure you improve CIBIL score without causing any further damage and reach a level that's satisfactory as soon as possible.

If you don't know anyone who is knowledgeable on the subject of credit management and credit reports reading then you can get in touch with CreditSudhaar.



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