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How To Check Credit Score? Research Team | Posted On Monday, January 21,2019, 03:15 PM

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How To Check Credit Score?



What's a credit score?

Credit score is a three-digit number that represents credit worthiness. Credit Score depicts ability to manage credit. It is critical to have a good Credit Score in order to be eligible to avail credit of any form from banks and financial institutions. All banks and financial institutions check credit score when you submit a credit application.

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SEE ALSO: Credit Score Calculator

How To Check Credit Score?

Who Computes Credit Score?

RBI has authorized TransUnion Cibil, Equifax, Experian and Highmark to compute Credit Score in India. All banks and financial institutions must compulsorily share all credit related transactions with the authorized credit bureaus. These companies are registered under ‘The Credit Information Companies (Regulation) Act’, 2005. Credit Information Bureau India Ltd (CIBIL) is the most popular credit bureau in India.

What is a Credit Report?

 Credit Report is a summary of all your credit related transactions. Credit Report contains the details of all your existing credit accounts and shows defaults, write-offs and settlements, if any. It may take up to 8 years to erase defaults and missed payments from the Credit Report. Basically, Credit Report depicts how well the debt is managed by an individual.

SEE ALSO: How to Improve Your Credit Score Fast

How to access your report?

Checking your own Credit Score is called soft enquiry. Soft enquiries have no impact on the Credit Score. It is advisable to check your Credit Score at least once every three months. Below mentioned are the steps to get your free credit score:

·       Log on to

·       Click on ‘Get free credit score now’.

·       Enter your details: Name, Address, Mobile Number, PAN and Date of Birth.

·       You will receive an OTP on the phone number. Enter the OTP, validate and proceed.

·       Accept the terms and conditions to proceed

·       Your Credit Score and Credit Report are displayed.

SEE ALSO: How Can You Improve Your Credit Score By Availing Personal Loans?

Why should I check my Credit Score?

It is advisable to check Credit Score at least once every three months. You must contact the credit bureau if any discrepancies are found. If a loan which is not availed by you shows up in the report, then you must report it to the credit bureau, if not, your Credit Score will be affected.

Checking Credit Score often keeps you updated on your credit position. Checking your own Credit Score is called soft enquiry. Soft enquiries have no impact on the Credit Score. So, go ahead and check often. Doing this prevents discrepancies that might hamper your Credit Score.

SEE ALSO: How To Correct Credit Report?

How Does the Credit Score Affect You?

Having a good Credit Score has various benefits like:

·       Swift processing of loan applications

·       Waiver on processing fee

·       Wide range of lenders to choose, as all lenders are ready to lend thanks to your Credit Score.

·       Lenders are open to negotiate interest rate

·       Lenders sanction unsecured loans.

Having a bad Credit Score affects you as mentioned below:

·       Lenders charge higher interest as they think lending is risky.

·       Lenders don’t offer unsecured loans

·       Your complete background verification is done; this is to ensure you are not going to default.

·       Loan processing takes longer time.

How your credit score is calculated?

Credit Bureaus arrive at a Credit Score by taking many factors into consideration. It depends on:

  • Repayment history - 35%
  • Loan amount sanctioned - 30%
  • Length of credit history - 15%
  • Credit mix - 10%
  • Settlements, write offs and defaults, if any.
  • Number of recent hard enquiries
  • Age and residential address

What Makes Your Credit Score Go Down?

  • Multiple credit requests: This leads to multiple hard enquiries which is a red flag.
  • Maximum credit utilization: If you have credit card, then try and limit your credit utilization at 30%. Maximum credit utilization is seen as a red flag as it shows you are credit hungry and in need of financial support.
  • Missing payments: Missing the payments and making it beyond due dates are considered to be red flags. Lenders think you are not in a good financial state and hence you have missed the due date of the payment.
  • Closing an old account: If you have an old credit card, then start using it for timely repayments. Closing old cards mean you are closing a credit account with a long history. Credit accounts with long history are a positive for Credit Score.
  • Loan defaults, write offs and settlements: Having any of these in your credit report means you were bankrupt or near bankruptcy which is a big negative.

What is the difference between a Credit Score, Credit Rating, and a Credit Report?

Credit Score is a three digit number, which depicts the credit worthiness of an individual, while Credit Rating is an assessment of a Credit Score. Credit Rating shows how good a Credit Score is. Credit Report is a summary of information related to all your credit related transactions. Basically, Credit Report contains credit history. It shows any slip-ups, if any, that you went through while repaying. Lenders would closely analyze Credit Report when they get a credit application from an individual.

Importance of Credit Reports for Companies and Businesses

Just like individuals have Credit Score and Credit Reports, businesses too have Credit Score and Credit Report. Business Credit Report is a credit history of businesses’ financial responsibility and companies, investors and financial organizations use this to decide whether or not the business is worthy to lend to or worth having a tie-up with. There are bureaus that compute business Credit Score. Business Credit Report and Credit Score work on similar lines of individual Credit Report and Credit Score.

Factors that impact business Credit Report are: Bankruptcy, legal disputes on a property related to the business, outstanding loan balances and payment habits, business size and years on file. Good business Credit Report helps expand your business. Most banks, financial institutions, investors, and companies closely scrutinize your business Credit Report before setting loan terms, determining insurance premiums, increasing lines of credit, or considering your business as a possible partner.
As an entrepreneur, treating personal credit and business credit separately is vital. This distinction can save you from possible financial barriers that stop your enterprise from expanding. This protects you from personal liability if your business suffers loss that results in bankruptcy.

Q. How long does a late payment remain on your credit report?

A. Late payments might remain on your credit report for up to 7 years.

Q. When is a payment reported late?

A. Late payments are reported to credit bureaus if you make a payment beyond 30 days from the due date.

Q. How Late is Too Late for Your Credit Score?

A. Late payments are reported to credit bureaus if you make a payment beyond 30 days from the due date.

 Q. Isn’t CIBIL the Deciding Factor in a Loan?

A. Cibil score is one of the most important factors considered by a lender. Your loan application depends on several other factors like current income, age and so on. Cibil score is not the only deciding factor.

Q. Does my Credit Score get impacted if I enquire about it?

A. Self enquires are soft enquiries and have no impact on your Credit Score.

Q. Change in Credit Score - How often does it happen?

A. Usually, banks and lenders report both negative and positive reports to the credit bureaus on monthly basis. It might take up to 3 months for your Credit Score to get impacted.

Q. What are Credit Reports Used for?

A. Credit Report contains credit history reported to the credit bureaus by lenders. The information in your credit report is used to compute Credit Score.

Q. Why Credit Reports are used?

A. Credit Report is checked by lenders when they receive credit application from individuals. They closely scrutinize Credit Report to understand how well the debt is managed. In short, Credit Report is a reflection of your credit history. 

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