An increase in awareness among people about management of personal finance has fuelled up the importance of credit score in recent times. Many forums these days are full of questions on how banks and other financial institutions work; what is credit score, how it can be checked etc.
So with this blog we will provide you a full understanding of Credit Score/report and what are things you must keep in mind before checking Credit Score:
Look out for errors
Before going into deeper aspect of it, first of all let’s understand what is a credit score? Well, a credit score is one of the most important factors which determine person eligibility for loan approval. It is a three digit number which ranges from 300 to 900. In India, there are 4 companies which provide information about your credit score.
So while checking applying for loan, you need to ensure that there are no errors in report that can lead to the rejection of your application. Always check the outstanding amount on your Credit Cards and loans. It can happen at times that you might have cleared the amount, but it may not reflect in your credit report.
So if you spot any kind of such error in your personal data, address, outstanding balance etc., immediately report it to the credit reporting bureau like CIBIL. Error free reports help makes you loan eligibility strong.
Passwords and pin hacking has become quite common these days, so it’s important to change them at regular basis. This identity theft is prevalent in Credit report too which can be checked easily in the enquiries section.
- Possible identity theft examples include:
- Loan accounts that were not initiated by you
- Credit reviews that you did not make
- Late payments or defaults that you did not make
- Wrong address or wrong phone number
In case of any such fraud, immediately report it to credit bureau or CIBIL and change it immediately.
Check account information regularly
A majority of the information in your credit report is related to your financial account. So, you need to:
- Review your accounts – check your loans and Credit Card accounts.
- Cross check your credit limit, current balance and payment history.
- Make a note of the accounts that are inactive and were closed.
- Make a note of the late payments and their negative remarks.
- Check for active loans and Credit Cards.
- Organise paperwork relating to your accounts and keep the details in order so that you can track them easily.
How to dispute error?
- Read your CIBIL report and spot the mistakes.
- Submit an Online Dispute Form at the relevant bureau website ‘Under Dispute’ section.
- CIBIL will take the matter up with the lender concerned. The lender will then accept or reject the dispute.
- When the dispute is accepted by the lender, the correction is made.
- The ‘Under Dispute’ remark will then be removed from the section.
A dispute resolution takes up 30 days to solve. So, keep in mind all the above points while checking your credit report.