Why is it Important to Monitor Your Free Credit Reports?

How would you feel if you want a home loan for your dream house but no bank would approve your loan application? Not very good, isn’t it? That’s exactly how Mr. Sindhu was feeling as he was becoming frustrated with the rejected loan applications that he had submitted to various banks.  After a few of his initial applications were rejected he thought he needs to try harder, and he sent many more applications to other banks simultaneously. However, contrary to what he expected none of the applications was approved. He was clueless, unsure of what to do. Fortunately, when he talked to his friend about the problem he, his friend, advised him to get a free cibil report online and analyze the same. He took his advice and got his copy of free credit report India. To his dismay he found that his friend was indeed right as he noticed that his CIBIL score was quite low.

A large number of people are so caught up with their lives that they hardly get time for paying attention to their CIBIL report. However, when a time comes when they need a loan they realize that their negligence has caused their score to suffer and so they face tremendous trouble in getting their application approved.

If you will talk to any credit management expert they will undoubtedly emphasize on the importance of credit report monitoring. Not only monitoring of credit report is a smart habit it has a number of advantages too. Here are some of the best advantages of monitoring your credit report-

1) Maintaining High Credit Score

One of the primary advantages of monitoring credit report is easy maintenance of high credit score. By regularly monitoring your report you can detect problems that are lowering your score early and fix them before a lot of damage takes place. This way you can keep up a decent score without working too much.

2) Identity Theft Prevention

One of the best ways you can prevent yourself from an Identity theft is by monitoring your credit report. By checking your credit report every once in a while you can notice the signs of identity theft. For instance, if you find unknown names, account numbers, or unfamiliar transactions in your report you could be victim of identity theft.  You can immediately contact your bank and file an FIR to prevent any further damage. On the other hand, if you don’t have the habit of checking your report frequently you could become a victim of identity theft and not even know it. By the time you come to know about the situation it could be too late.

3) Detecting Inaccuracies- One of the most common reasons why people get a low credit score is discrepancies in their report. Wrong or inaccurate information sent by your bank could easily cut a huge chunk of score from your report. By developing a habit of frequent credit report monitoring you can detect these mistakes and have them corrected by either contacting your bank or the CIBIL authority itself.

4) Managing Finances- You can manage your finance better if you keep a track of your transactions, EMIs, and credit card payments.  Your credit report carries the information of all your recent transactions, bills, and payments, thus, allowing you to easily manage your finances. You could have your own separate file of finances but a credit report works as an excellent finance summary.

A lot can go wrong if you don’t pay attention to your credit report. Many people don’t take their credit score seriously and pay heavily for the same in future when they least expect it. Thus, it is better to detect upcoming issues sooner and nip them it the bud rather than be careless and find yourself swamped in a mess of problems later.

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