These days in order to get the loan approved, an individual needs a good credit score. A credit score is a 3-digit number ranging from 300 to 900 that generally reflects the creditworthiness of a loan borrower. It plays a crucial role in approval or disapproval of any type of loan as most of the banks primarily depend on this score only to decide whether to lend money to an individual or not.
However, in India, any information related to credit score is wholly and solely provided by the registered credit agencies like Credit Information Bureau (India) Limited (CIBIL), Experian, and Equifax. But then, this information is not only shared with banks but also with other agencies with whom you didn’t want to share. In that case, you can opt for Credit Freeze. Let’s understand this in detail:
What is Credit Freeze?
A Credit Freeze is a term in which an individual can stop financial creditors from accessing your credit-related information. Under this, you can report the credit rating agencies to stop sharing your financial spending details to others. However, if anyone wants to look at the information, they need prior permission from the individual.
In recent years, it has emerged as an important tool as it helps in preventing data/information theft and further misuse of your account information related to Credit Card, driving license, Social Security numbers, date of birth, phone number, emails, etc.
With an increasing number of cases like credit card frauds and data breach, freezing the credit account is becoming favourable amongst most of the individuals.
Advantages of Credit Freeze
- Prevents data theft/ breach so as to avoid fake lenders.
- You can apply this for free.
- You can easily unfreeze it during the time of your application for loan so that the banks can easily check all your information before the final approval.
- You can avoid irritable calls from sales executives of different banks.
Procedure of Credit Freeze
Freezing your credit score is not a hectic procedure. You just need some small tips to follow:
- Report the credit agencies that you want to freeze the credit information.
- Provide details of your account, so that they can start the procedure.
- After receiving the request each credit agency will send you a confirmation letter containing a unique PIN or password. Keep it confidential as you will need it later at the time of unfreezing the score.
Procedure for Lifting-Up Credit Freeze
- The PIN or the password provided to you during the credit freeze time is used at this point of time only.
- Here you have two options, either to lift it for a temporary period of time or permanently.
- In case of temporary unfreeze, you can provide the single-use PIN to the lender so that they can have access to your account and score details. This can be done online.
- In case of permanent unfreeze, you can ask credit agencies to remove it altogether through call or just an email.