The credit score is a numeric summary of creditworthiness. Creditworthiness defines the debt repayment capabilities. Bankers or lenders use credit scores to determine if a personal loan, a home loan, a loan against property, a vehicle loan and so on, can be sanctioned.
India has four major credit information bureaus: Equifax, Experian, CIBIL TransUnion and CRIF High Mark. These agencies take into account your credit history (track record of repayments), loans availed (unsecured/secured) and other important financial aspects to offer you a score. Typically, a credit score ranges from 300 to 900. The lower the number, the lower is the credibility of a person and vice versa.
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An Experian score of 700 or more is a good score, while a score of 800 or higher is an excellent score. Usually, many scores fall between 600 and 700. A rating between 500 and 700 is considered average, while a score below 500 is considered to be poor.
If your score is lower than 500, you are at risk of not getting your loan sanctioned. A person with a lower score is more likely to be rejected by NBFCs or banks. On the contrary, an individual with an excellent score can get a better deal (Banks are willing to negotiate on interest rates). A good score offers the following benefits:
SEE ALSO: Home Loan Interest Rates Rising
We all understand the relevance of having a good credit score in today’s highly competitive personal finance industry. You may not have a good credit score. There are certain ways to enhance your credit score. The following are the most commonly used tips:
Pay Your Credit Card Bills On Time: Many people use credit cards, which are an extended banking facility offered today. Whether you use a single card or multiple cards, be sure to make the outstanding payments in time. If you default on payments, your debt obligations increase and credibility is negatively impacted. All money doctors or wealth advisers recommend people stay debt-free to have a better score.
Check the Accuracy of Credit Reports: A credit report is a complete breakdown of a person’s credit history. It contains crucial personal and financial details, which could be inaccurate or outdated. Experts suggest that you check credit reports regularly for accuracy and make sure its error free. If the details are incorrect, bring them to the attention of the concerned banks. Get them corrected as an inaccurate credit report may lead to a wrong, poor credit score.
Establish Strong Credit Tenure: There is nothing much you can do to improve creditworthiness, if you do not have sufficient credit history. You should have a credit history of 5 years or more. For instance, an individual with a one-year credit history may or may not get a loan sanctioned.
IndianMoney.com is India’s Largest Free Financial Education Company. It offers an easy, user-friendly platform to help you check the credit report and credit score, absolutely free. Just follow the steps below to get to know credit score:
Step 1: Visit the official website of IndianMoney.com
Step 2: Click the ‘Credit Score’ button that appears on the top of the website
Step 3: Just furnish the personal details (First name, last name, Email address, date of birth, gender, address, contact number and PAN card number)
Step 4: Click the ‘Get my credit report’ button
Step 5: Furnish the OTP sent to your mobile number
The vision of IndianMoney.com is to help people find the best financial product and become the most trusted financial education company in the World. Check credit score and credit report on IndianMoney to get the most accurate score. This makes sure home loan and other important loans are easily sanctioned by banks and NBFCs. IndianMoney.com has tied up with Experian to offer free credit score.
SEE ALSO: What Is My Home Loan Eligibility?
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