How to Understand Your Credit Report

The first step towards becoming an aware credit user is to know your credit score. However, merely knowing your credit score is not enough. You should know how to read and analyse your credit report as well. Doing so shall help you in identifying and understanding the factors that are leading to a low credit score, if any. Also, if there are any discrepancies in the report, the same can be tackled if one comprehends their credit report.

How to Read your Credit Report

To read and understand what is stated in your CIBIL report, you need to be familiar with its components. Check for these in your report and you will be able to make an understanding of where you report is indicating.

Components of a CIBIL Report

1. CIBIL Score

This will be a 3-digit numeric value ranging from 300 – 900. You will also find score factors, i.e. the factors that affected your credit score. 

2. Personal and Contact Information

This section shall hold your name, address details and phone number as provided by you.

3. Employment Information

Here you will find your employer’s name, type of your employment (e.g. salaried) and monthly income. 

Apart from these, your credit report may contain the following as well: 

Account Information

1. Open/closed accounts
2. Dates when these accounts were opened/closed
3. Payment history
4. Credit utilization
5. Loan status (Paid/pending)

Credit Inquiries 

If you’ve made any credit card or loan applications, the lender will pull your credit history from the bureaus. This will account as a hard inquiry. Such multiple inquiries shall impact your credit score negatively. However, if you check your credit score regularly without the intention of applying for credit, it is considered a soft enquiry and this enquiry does not feature in your credit report.

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