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How To Read Your Credit Report?

IndianMoney.com Research Team | Posted On Wednesday, April 24,2019, 03:08 PM

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How To Read Your Credit Report?

 

 

The credit score is a 3 digit numeric summary of your credit history. The credit report gives history of your credit behavior and also detailed information on loans and credit cards you have availed. Banks and Financial Institutions check credit score and credit report before sanctioning home loans and other loans.

A credit report helps banks and financial institutions access creditworthiness. It helps banks know if you have the capability and the will to repay loans. Credit report gives payment history across loan types like home loan, car loan, personal loan and credit cards over a period of time.

Loans are sanctioned easily, if you have a good credit score. Negotiation power rises with good credit score. Make it a point to go through credit report and know credit score to inculcate financial discipline and stay far from the loan trap. IndianMoney has tied up with Experian to give free credit score.

Want to know more on Credit Score? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

How To Read Your Credit Report?

What is CIBIL score?

TransUnion CIBIL Ltd. is a credit information Company. It has credit files on more than 60 Crore individuals. CIBIL score ranges from 300 to 900. A high CIBIL score improves the chances of your loans getting sanctioned. Maintain a CIBIL score of 750 and above to get that home loan.

What is Experian Credit Score?

Experian credit score is a numeric summary of repayment history on existing and past loans and credit cards.  The Experian credit score is calculated from Experian credit information report. Banks sanction loans on high Experian credit score.

Experian credit information report contains loan history (repayment track record), your identity information, loans and credit cards availed, hard enquiries and so on.

SEE ALSO: Check Credit Score Online

How to Read CIBIL Report?

Your CIBIL report has:

  • Personal Information: Check name, date of birth, gender, PAN, Passport Number and Voter Number.
  • Contact Information: Take a look at your address and mobile numbers provided in this Section.
  • Employment Information: This is monthly or annual salary as given by banks and financial institutions.
  • Account Information: This section contains names of banks which have sanctioned the loan, type of loans availed like two wheeler loan, loan against property, loan against security and so on, account numbers and ownership details, date of opening and account and date of last payment, loan amount and current balance and a month on month record of around 3 year repayments.
  • Enquiry Information: When you apply for a loan/credit card with a bank or financial institution, this bank/FI checks credit report and credit score. This is a hard enquiry. Too many hard enquiries affect credit score as they show desperation for a loan. Check the number of hard enquiries in the Enquiry section.

Credit Information Bureaus in India

TransUnion CIBIL: This is one of the most popular credit information bureaus in India. CIBIL, today known as TransUnion CIBIL, was founded way back in the year 2000. Public and Private Sector Banks like SBI, HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Yes Bank, Axis Bank, Canara Bank, Union Bank of India and many others, check CIBIL score before sanctioning loans. Housing Finance Companies and Financial Institutions also check CIBIL score. CIBIL has information across 3 divisions:

  • Consumer Bureau
  • Commercial Bureau
  • Micro Finance Institution

Experian: Experian Credit Information Company is jointly operated by a number of Companies like GUS Holdings BV (Netherlands), Union Bank of India (UBI), Axis Bank Limited, Indian Bank, Federal Bank Limited, Punjab National Bank (PNB), Sundaram Finance Limited, Magna Fincorp Limited, and VIC Enterprises Private Limited. Banks and Financial institutions provide your credit information (Consumer Credit Information) to Experian on a monthly basis. Experian creates your credit information report based on this information and assigns you an Experian score.

Equifax: Equifax in India is registered as Equifax Credit Information Services Private Limited (ECIS). It has its headquarters in Mumbai. ECIS is a joint venture between Equifax Inc., USA and 7 leading financial institutions in India. Equifax provides lenders and banks borrower’s credit behavior, repayment history, address and demographic information, prospective borrower’s credit worthiness and access to Equifax ePORT. 

CRIF High Mark: CRIF High Mark is a leading credit information bureau in India. CRIF High Mark gives Personal Credit Score and Business Credit Score. Personal Credit Score is a measure of your financial health. The 5 major components of Personal Credit Score are:

  • Payment History
  • Length of credit history
  • Credit Mix
  • Amounts Owned
  • New Credit

You also have the Business Credit Score which is a measure of Company worthiness. The components of Business Credit Score are:

  • Information on the Business: This is nature of the business, address and related parties.
  • Credit Score: This gives an idea on the creditworthiness of the business.
  • Loan History: Details of the credit facility availed by the business.
  • Past Searches: Inquiries requested by the lender with CRIF High Mark against the business.

How Credit Score Affects Job?

Take a look at this shocker; Around 60% of Companies don’t hire employees with low credit score. If you care for your career, make sure you have a good credit score. Employers check current and potential employee’s credit report, to get an idea on financial stability. To protect your career, check for errors in credit report and credit score. If you identify mistakes in credit report, get then rectified immediately.

SEE ALSO: Why You Need To Check Your Credit Report?

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