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When Was the Last Time You Monitored Your Credit Report?

12-Aug-2015 written by : FSI-Team

Mr. Ram Kumar Sharma was a health freak. He led a disciplined life, yoga in the morning, a bowl of fruits after that, green tea without sugar etc. He had adopted many such ways in the interest of his healthy mind, body and soul. Not just this. He had made it a point to get all essential pathological tests done every year on January 1st. This date was convenient to remember. He filed his earlier test reports and compared them with his latest ones to notice any differences. He always sought a doctor’s opinion over his reports. Unfortunately, he wasn’t as mindful of his credit health.

Well, the concept of credit scores is still at a nascent stage in India that it wouldn’t be surprising if most of you said “never” in response to the above question. In countries abroad, this concept has been age old and well ingrained in their financial ecosystem. However, it has only been around for not more than sixteen years in India. It seems that CIBIL already has data for more than 30 lakh Indians and is adding to its database everyday. But only 1% of those would know anything about CIBIL or its functions and its equation with banks. There is mass ignorance about this idea of an individual credit rating and how every individual’s credit aspirations can be affected by it. Maintaining a healthy credit report and aiming for a high credit score is in your best interests.

Below are mentioned not just some compelling reasons on why you should monitor your credit reports regularly but we have also listed a few ways by which keeping a customary check on your report will be very easy.

1. Are you planning to apply for credit card or a loan in the near future? Experts have said it again and again that you must ask for your credit report at least six months before you apply for any fresh credit. This is so because, if your score is not within the favourable bandwidth or if you have spotted any errors in the report then you will have enough time on hand to have it rectified before any lender views it.

However, if you feel you are well sorted for now and do not foresee any demand for credit for a couple of years then also you must check your report atleast once every year. This is to keep an eye on your own credit performance and to avoid any last minute surprises.

One easy trick would be to pick a day as “check your credit report day” and align it with another important day. Just like in our example of Mr. Sharma, you could pick a day like your birthday or anniversary and make it a point every year to order a copy of your credit report on that same date. This way you will not forget to do it. Our clients have even suggested days like Akshya Tritya or Dhanteras to draw their reports as they are considered auspicious for financial dealings. Well, whatever works for you is okay as long as you do it without fail every year.

2. By monitoring your credit report periodically you can ensure that it has accurate information about your

  • Personal details like your name, address etc
  • b. Account details like your credit cards and loan account information including current outstanding balance, open and closed accounts, etc
  • c. Other information like that of your employer details and income. These factors are vital to your loan screening process.
  • d. Number of enquiries from lenders. This information is also very important because you may spot unauthorised enquiries here which may help you detect a case of identity theft. Cases of identity thefts are real and are widely reported. Enquiries by lenders have an adverse impact on your score. So if you are regularly checking your reports you can easily spot any such lenders whom you do not remember as authorising to draw your report.

If this turns out to be the case, you could immediately raise a dispute. All you have to do is to go to CIBIL’s website and raise a CIBIL dispute.

Taking clues from Mr. Sharma, do keep safe your old credit reports. This is so because when you next order your copy, you will be able to spot the changes in your score and report. If you see your score declining then you could look for factors affecting it in your report and compare it with your old reports. You could then avoid those factors and help raise your score in the subsequent period.

3. We all will agree that not all of us are technically sound in the financial sector. Most of us may not be able to make heads or tails of the many jargons used in the reports. Like the wise Mr. Sharma, you must also seek expert advice on your credit report and find out from them ways to improve credit score fast and how to maintain them.

4. Incase there is no need for credit in your foreseeable future, then we advice that you should withdraw your report at least once in a year. But there are ways to watch your own credit health all year round. You must set alerts for transactions on your salary account and credit cards. You must set reminders for timely payments of your EMIs and observe control over expenses which you can pay off, given your income. All these are very important for your financial well being.

We hope this article has helped you to drive to a better, fruitful and vigorous credit future.

Happy credit to you.


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