Credit score is a three digit number which depicts your credit worthiness. Credit score is checked by most lenders when you apply for a loan. Credit score is a three digit number in the range of 300 to 900. Credit score is one of the most important factors that lenders consider while processing your loan application.
Credit score is mainly based on repayment history. If you have availed loans from authorized lenders any time over the last 7 years, then you would have a credit score. Individuals with no credit history will not have a credit score. If you have regularly repaid your loans, then you will have a good credit score. If you have a history of missed payments, loan defaults and write offs then your credit score would be low.
RBI has authorized CIBIL, Experian, Equifax and High Mark to provide credit score. All authorized lenders are mandated to share all credit related transactions with the four credit rating agencies for the purpose of credit score calculation.
Credit scores of 700 and above are considered good and lenders would generally process loan applications of these individuals faster. Individuals having a credit score of 800 and above are offered collateral free loans. Lenders would straightaway reject loan applications of those individuals with credit score lesser than 500, unless they furnish collateral.
Knowing the importance of credit score, it is only wise to check it often. If you find any discrepancies in your credit score and report, then you have to immediately contact the credit score provider. If not, your loan application would be dealt a huge blow.
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Moreover, if you check own credit score, this is considered a soft enquiry and has no impact on your credit score. There is no reason why you should not check your credit score often. Go ahead and check it to avoid identity theft, wrong entry of data and avoid unnecessary hassles that you may have to go through. It is advisable to check your credit score at least once each quarter. This not only helps you track your credit score, it also helps in knowing where you stand, financially.
SEE ALSO:Check Credit Score Online
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