How private is my credit report?

07-Mar-2018 written by : FSI-Team

How private is my credit report?

In this age of technology, data has assumed great significance. Analytics are used worldwide to decode customer preferences and provide personalised products and experiences to them. And then there is social media where each person has a virtual presence on every other social media platform. With so much of data and information floating around, the growing concern is privacy and security. This is as true of your credit information as of any other data pertaining to you.

Like everybody else around you, you may be using credit extensively and buy everything from groceries to gadgets on credit. As a conscientious user of credit, you also know that your credit score matters and you do your best to your credit records blemish free. But at a time when it feels you are under constant surveillance, have you really wondered how safe is your credit information? Do you worry about whether or not your credit report is really private?

Well, you can heave a sigh of relief at the thought that your credit information is safe with reputed credit bureaus. But does this mean it is completely private and that have exclusive credit information access rights? Well, that is not true. Here is all you need to know about who, when and how your credit information is accessed.

A prospective lender

Every time you apply for a fresh line of credit, be it a credit card, a vehicle loan, a home loan or an HDFC personal loan, the lender you have applied to can put in the request to access your credit information. This is because your CIBIL score is considered a barometer of your financial health and only if it is satisfactory, is your application likely to be approved. Further, every time a prospective lender accesses your credit information it is recorded as a hard inquiry on your report.

This is as opposed to a soft inquiry that is recorded each time that you yourself access your report. While a soft inquiry does not have a negative impact on your CIBIL score, a hard inquiry brings down your score by a tad. Also, if there are too many hard inquiries in quick succession recorded in your CIBIL report, a lender is likely to tag you as credit hungry. This too will work against you when you make a credit application.

A prospective employer

A good CIBIL score is not just necessary to access an HDFC personal loan, or any other line of credit when you are need of one, but may also play a crucial role in your job pursuit. A lot of private sector companies prefer to check the CIBIL score and report of a prospective employee. A good score and impeccable credit records bear testimony to the fact that the individual is responsible with regards to credit behaviour. The employer is therefore likely to think of the individual as worthy of taking on the role and responsibilities attached to the post he or she has applied for.

However, an employer, unlike a lender, cannot access your credit information without your permission. Therefore, you may be asked to submit a copy of your credit report at the time of making a job application along with other relevant documents.

A word of caution

Thus, while you may draw solace from the fact that your credit information is safe with the bureaus, do make it a point to carry out periodic checks on the same to ensure that no errors and discrepancies make way in the report. This is, unfortunately, not an uncommon phenomenon given a large amount of data handled between banks and credit bureaus.

The other thing you must remain cautious about is sharing your financial information, especially over social media platforms. While nobody else can access your CIBIL report, sharing of crucial financial information even with close friends or family member strongly advised against. Mishandling of such sensitive information can lead to a financial identity theft and ultimately damage your CIBIL score.



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