When it comes to loan approval your credit report plays an important role. These days almost all the banks first check the borrower’s credit report in order to have a look at the payment history.
A credit report is that information which provides a summary of an individual’s credit history as well as facts and figures of various credit accounts, payment details, personal & employment details, etc. One can avail his/her credit report via various organisations like CIBIL, Equifax, etc.
Although the structure of the report may differ the overall information remains the same. However, at times the report may contain some errors or discrepancies leading to lowering of the credit score. Therefore it is important to read and understand it correctly. Scroll down and get to know the complete structure of your credit report:
First Section: Credit Score
The very first information which appears on a credit report is the credit score of the individual. It is a three digit number that ranges from 300-900. The lower is your score; least is chances of loan approval. On the other hand, if the number is 750 and above, it means you have good credit history and hence chances of loan approvals get more.
Second Section: Personal Information
This section of the report carries details of an individual as per the details fetched via Pan Card Number. This information contains individual’s name, gender, voter ID, date of birth, address, etc. Do check all the information twice before applying for any kind of loan. Sometimes, wrong information leads to frauds.
Third Section: Employment History
This section deals with your employment-related information like a various organization you have worked with till date, tenure, etc. Banks fetch all these information via various sources.
Fourth Section: Accounts and Repayment History
Accounts and Repayment History provides information related to all your bank accounts, credit cards, payment and repayment history. Perhaps, it is one of the most important sections of the credit report as all this information plays the deciding factor in your loan approval. So, if you have missed with any of your credit card or loan EMI this section automatically provides details of the month and time.
So, it’s better to double-check all the information provided in this section because any wrong information can affect your credit score as well as the loan approval chances too. In case of any error found in the report, get it fixed through credit agencies or bureaus.
How to get Errors Fixed?
- Visit the CIBIL website and download your report.
- Check report, in case there is any error, fill up the online dispute resolution form with correct information.
- After submitting the details, a complaint id will be provided to you.
- The credit agencies then send these discrepancies to the concerned lender so as to resolve your dispute.
- If the bank agrees on the error, credit agencies update that error.
- Check your report again after 30 days so as to look whether the error got fixed or not.
Fifth Section: Credit Inquiries
This section carries details of the various inquiries which you have made for any loan or credit card in any banks or financial institution. It also consists of information related to loan type and loan amount. However, there are two types of credit inquiries- Soft and hard. A soft inquiry is when an individual checks his/her credit score by themselves. On the other hand, a hard inquiry is when a lender checks your credit score to make a decision on loan approval. Whenever a hard inquiry is done, it stays on the credit report for a time of 1 year. Sometimes it may hurt the credit score.