23-April-2016 written by : FSI-Team
If you’re looking to rebuild your credit history, or even just keep track of it, the right place to begin would be your credit report. Knowing your credit information is important because virtually no financial transaction such a loan or credit card application goes though without the lender in question checking these details.
Generated by a credit information company or bureaus, a credit score is a summary of your detailed credit information as mentioned in the credit report. Typically ranging between 300 and 900, a higher scores increases your chances of approval when you apply for a fresh line of credit, be it a loan or credit card. A credit score is calculated taking into account your credit history, the amount and type of credit you use, and your repayment behaviour, among other factors.
There are four credit bureaus in India, of which CIBIL is the oldest. Hence colloquially a credit score is often known as a CIBIL score. While scores across bureaus may differ slightly, the logic used to calculate them is the same. So whether you opt for CIBIL or any other bureau (namely Equifax, Experian and CRIF High Mark) what you will get is a credit score that helps you gauge your financial fitness.
With CIBIL, a score of 750 and above is generally considered to be a good or healthy score and is looked upon favourably by most banks and financial institutions.
Currently, CIBIL itself does not offer a free CIBIL score; a report is available via a quick and hassle-free process on their website on payment of a nominal fee. There are convenient payment options as well, making it easier than ever before to avail of a credit report.
However websites such as www.freescoreindia.com offer you a quick glimpse at your score for free, upon registration. This is a good platform to know about your score, following which you could always choose to request for a copy of your complete report from any or all of the bureaus.
You can also avail of a free credit score by logging on to creditsudhaar.com, India’s premier credit health management company.
A credit score is important for several reasons, some of which include:
Overall, a healthy credit score holds the key to your financial fitness and can to a large extent determine what your creditworthiness is. In many cases it can be the differentiator between being offered a loan, or your application being rejected outright.
There are ways by which you can increase credit score, and the first step towards doing the same is by calling for a copy of your credit report. Once you are armed with this information it becomes easier to determine whether your score needs to be improved. Equally important, any discrepancies or errors in the report can also be pinpointed and rectified on intimating the concerned bureau.
Well, to begin with, getting a free score is not a bad idea at all. Not only are you introduced to the concept but you also get a fair understanding of where you stand. However following this if you believe that you want to know more about your credit health (and in greater depth), it is prudent to pay for your credit report. This is because while a score is an indicator of your credit health, it is a summary of what the detailed report contains. For instance, if you find an account mentioned in the report that does not pertain to you, the information can be rectified, which is likely to boost your score, plus save you from the very real danger of identity theft.
To know your credit health, start off by calling for a free score. It is a good practice to check your CIBIL score at regular intervals; hence you can always step up to a paid report. Remember though that the right time to begin is now!