Knowledge is the key to success’, is a wise old adage, holding far greater relevance when one talks of financial success. In today’s monetary supermarket, a thorough financial health check has become more of a prerequisite than an alternative. In such a scenario, a clear understanding of terms and concepts is elementary to become more credit savvy.
Since one’s credit score is the ultimate diagnosis of one’s financial well-being, the following topics are dedicated to educating and equipping you with enhanced knowledge in the credit domain. This can help you make informed decisions in life and, in turn, build and improve your credit character.
Here’s the list of must-read articles to help you get a better understanding of credit scores, credit reports, credit bureaus and the relationship between loans and credit scores.
About the Credit Bureaus
What is Experian Credit Report?
Experian Credit Report offers an individual’s detailed credit history having information about both his previous and current credit cards and loans. Experian being the first Credit Information Company to receive a license in India and is therefore trusted for its innovative approaches and information services.
What is CIBIL Report?
CIBIL report is a report produced by Credit Information Bureau India Limited, which reflects an individual’s borrowing and payment patterns. Complex mathematical algorithms are applied to the client records submitted by member banks and credit institutions to arrive at a credit score and also to publish this credit report. Most of the banks and financial institutions prefer referring to this report while determining your eligibility for a loan or a credit card.
What is Equifax Credit Report?
Equifax Credit Report is a compilation of your credit history with details of your personal as well as credit accounts including the loans you have taken or the credit cards you own. It also reflects your Equifax Credit Score.
What is CRIF High Mark Credit Report?
CRIF High Mark is one of those bureaus which cater to the needs of all kinds of borrowers like retail consumers, commercial borrowers along with MSME and microfinance borrowers. All these borrowers can avail their CRIF High Mark credit report reflecting analytics and managed data from the Micro Finance Data base.
Basics of Credit Score and Credit Report
What is Credit Report?
A report which reflects a person’s credit history with detailed information of his/her credit accounts and loans, bankruptcies and late payments (if any) apart from identifying information is called a credit report. It is issued by licensed Credit Information Companies.
What is Credit Score?
Credit score can be defined as creditworthiness of a person coded into a 3 digit numerical expression. Credit score is the determining factor for the approval of a loan or credit card application. This score is affected by a range of factors like payment and borrowing patterns, number of credit card or loan applications, credit utilization etc.
How to Read your Credit Report?
Credit Reports usually have different sections for better categorization and easy comprehension. The most common sections of the credit report are:
- Credit Score: This section speaks about your credit worthiness.
- Personal Information: This section has your personal details as reported by any of your lenders.
- Employment Information: This section has your employment details at the time of opening of any of the credit facility, as according to the lender.
- Account Information: This section contains the most relevant information like the details of all your loan accounts and credit cards owned by you.
Enquiry Section: This section contains details about all the enquiries made about you from different lenders.
How to Check Your Credit Score?
You can check your credit score either online or offline. You can use the Paisabazaar portal to get your Experian credit score and report by filling in a few details.
For knowing your CIBIL score, you need to fill in the Credit score request form and submit it either online or mail it to the designated address. After you have paid Rs.500, your credit report will be mailed to your inbox.
Difference Between Credit Report and Credit Score
While credit score is a statistically generated 3 digit number which indicates your credit worthiness, Credit Report is your detailed credit history which has your personal information along with details of your loan accounts and credit cards.
CIBIL Transunion score is a 3 digit numerical representation of your credit worthiness given by Transunion CIBIL Limited based on your credit history.
Know & How to About CIBIL Credit Score
How is CIBIL Calculated?
Your CIBIL score is calculated on the basis of a range of factors like credit history, credit utilization, credit mix and duration along with other factors.
Benefits of a good CIBIL Score
Apart from increasing your approval chances for loans or credit cards, a good credit score also has added advantages like faster loan sanctioning, lower interest rates and better credit card offers.
Factors that Affect Your Credit Score
Your credit score is statistically generated, hence a number of factors play a major role in determining how high or low your score ia. Factors that affect your credit score include-
- Credit Utilization Limit
- Repayment History
- Requests for higher credit limit
- Percentage share of unsecured loan amount
Being a loan guarantor
Myths About Credit Score
There are a number of myths associated with Credit score like- using credit cards leads to increased credit card debt, closing down a credit card will increase the score, CIBIL score is affected by one’s income etc.
How to Repair Faulty Credit Report
To repair a faulty credit report one needs to submit a dispute resolution form with the necessary details. The credit bureau will then update your credit report after having verified from the lender.
Ways to Improve Your Credit Score
To improve your credit score, you need to study your credit report, make timely and full payments and avoid applying for new credit cards and loans frequently.
Maintaining a good credit score is not that tough; if you are financially disciplined and follow practices to achieve a good credit score. Your credibility for paying off debts is determined by this 3 digit number; hence it is advisable to be cautious. You must be aware of the bad practices that lead to a poor credit score to prevent you from committing mistakes.
Using the information above and the mentioned links can help you make informed decisions and, in turn, build and improve your credit character.
Loans and Credit Score
- Credit Score for Personal Loan
- Credit Score for a Credit Card
- Credit Score for a Car Loan
- Credit score for Home Loan
- Loan Settlement and Your Credit Score
Your credit score is one of the key determinants that affect your eligibility for various loans like personal loan, home loan, car loan etc. Depending upon how good or bad your scores are your chances of getting a loan approved vary. Also your chances of getting a credit card depends on your credit score partly, if not completely. This is so because your credit score is a prediction of your capability to pay off debts. Therefore be it credit cards or be it loans, your credit score plays a crucial role in getting quick and easy approvals. Read further to know how your credit score affects your new loan and credit card applications.