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Free Credit Score: Is There a Catch?

18-Apr-2018 written by : FSI-Team

Free Credit Score: Is There a Catch?

The young professionals of today's era are becoming smart about their creditworthiness. They understand that in order to get a loan easily and that too at an affordable interest; they must have a high credit score.


However, despite the increased awareness, there is a lot of confusion surrounding the subject. This is especially true with the free credit report that the credit rating agencies and other independent companies are offering to the people.

If you recently learned about the free CIBIL report, then it's natural if a question comes to your mind: "is it really true, or is there a catch?"

Let's find out, starting from the beginning.

The Paradigm Shift

For many years, credit users had to pay for their credit reports at all the major credit rating companies such as CIBIL, Experian, High Mark, etc. Although these companies offered discounts and lower prices for subscription plans, etc. there was no concept of a "free report". However, this changed in 2016 when the Reserve Bank of India enacted a new rule as per which the credit rating agencies were required to offer one free credit report to every credit user per year from 2017 onwards.

Credit Report Types

A standard and well-recognized credit report is the one that's provided by major credit rating bureaus like CIBIL. The basic format and scoring model of this document may vary from agency to another but overall, it’s similar everywhere. So, in all of these reports, you will find your credit score, repayment history, loan accounts, current debt, income details, personal details, etc.

The standard credit reports are available in two formats- paid and free. So, coming back to the original question- is there a catch with the free report? Well, the answer isn't quite simple.

Technically, the free credit report should be identical to the paid credit report, and in most cases, they are. That said, there are indeed a few problems with them.

For starters, the process for getting a free credit report is quite time consuming and difficult. Most of the agencies require you to wait for at least a week before you get your report. Not to mention, the "free credit report" option isn't made well-known to the consumers by the agencies through their websites.

Although it's hard to say whether the hurdles are created on purpose or not, the problems are common to all major agencies. This is understandable because obviously, the agencies would want you to pay for a report rather than have it for free. However, a major agency i.e. CIBIL defended itself by saying that it's receiving a large number applications for the free reports on a daily basis, and due to the lack of an automated system, it's taking time to process them all.

Alternative Reports

Apart from the standard credit reports, you can easily find a number of websites that are offering an unlimited number of free credit reports for the people who want to apply for a personal loan, car loan, etc. However, these are really something you should be careful about.

A large number of websites that claim to offer a free report don't really offer a standard report, but an alternative one that's based on the information provided by you. For instance, they try to get a general idea of your financial standing by taking into account your repayment history, current debt, income, and other related factors. On the basis of this information, they offer an approximate score.

The problem with the alternative so-called "free reports" is that they are not accurate. In fact, you should take these with a grain of salt and not base your major financial decisions such as taking a home loan, personal loan, etc. on them.

The Bottom Line

All things considered, if you are not in a hurry then it's a good idea to get your free credit report from any major credit rating agency to check your score and your financial history. However, it's best to avoid the alternative reports as they will barely help you. In fact, they might as well misguide you towards poor decisions. Good luck!


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