Reasons why errors on your CIBIL Report can be Destructive

Priya wanted to gift a new card to her parents on their anniversary. She chose the car, model and color keeping her parent’s choice and requirements in mind. She then applied for a loan, she knew it would not be difficult to get a loan as she had all the required documents and she had also maintained a good credit history. Her loan was rejected due to a low credit score and she was almost shocked as she had always been a responsible borrower. On going through her Credit Information Report she was shocked to see that there were delayed payments reported in it. She had never missed a payment and it turned out it was a reporting error by the lender.

So Priya missed a chance to gift her loved ones at the right occasion, this could have been avoided if she had been pre-emptive and had applied for a free CIBIL Score and checked if the score is acceptable to the lending agency. Despite being meticulous in her credit habits she had to face some problems.

How can errors in your CIBIL Report be Destructive?

While for Priya it was disappointment, a low CIBIL score can cause bigger problems too. It can result in financial loss, missed opportunities and a lot of wasted time and effort for no fault of yours. Being credit healthy is important and it could be doubly distressing if despite being a careful borrower your score is low due to an error in the report. While these errors can be rectified and once they are removed from your report they will enhance credit score but sometimes the delay can cause a lot of trouble and loss too. These errors could be wrong reporting of a default in payment, a loan or credit card that does not belong to you being reported under your name which will reduce your borrowing capacity and if there have been any defaults on that loan they will also be include in your score calculation.  Here are a few ways in which these errors can be destructive:

  • Cause Loan Rejection: If a lender reports that you have missed a payment or the loan is reported as settled erroneously then this could cause some serious trouble for you. Not only your credit rating will take a hit, a look at the CIR will scare away the lenders. No lender wants to lend to a person who does not pay on time or is a default risk. Thus the lender will not know that the reporting in the CIR is erroneous and they will reject your loan application without a second though whatsoever.
  • Harm your Job Prospects: This may not seem like the most obvious impact of an error in the CIR but could be more harmful then getting a loan rejected. Imagine not getting the dream job or losing out to a competitor in the final round of interviewing due to an error on your report which can cause you to appear like an untrustworthy candidate or somebody who is debt ridden. Increasing number of employers are seeking credit check of prospective employees along with a background check and a health check. This is to ensure that the employee that they hire is trustworthy and will not get into legal trouble due to unpaid dues. Thus an error could cost you dearly at a job interview.
  • Credit Card Application Rejection: An error in the CIR could also cause a new credit card application to be rejected. If your CIR show you have a high utilization ratio, missed payments or have a “settled” status account in your report even erroneously it could lead to the card company rejecting your application. While you can certainly apply for the card again after rectifying the error but sometimes the delay can cause more than expected trouble.
  • Make a loan more expensive: Errors on the CIR can lower your scores which can cause lenders to assume you to be a high risk borrower. This can make them charge you higher interest rates on loans then they would have charged otherwise. Higher the risk, higher the interest you are charged so you can end up paying more interest on a loan for no fault of yours.

The best way to avoid getting into a situation like this is to get your credit report from time to time so that you are aware of any errors in it and get sufficient time to rectify it. This will ensure that you do not suffer any losses because of these errors.

 

What you must do if there are errors on your credit report

Financial advisors always suggest that one must review the credit report periodically. The information in the credit report has a direct impact on your credit score. It determines whether you can get loans in future and how much interest you need to pay. Hence it is imperative to make sure that the data in the report is accurate, complete and up to date. A periodic check also helps guard against identity theft. You can quickly find out if someone uses your personal information to commit fraud.

How can errors crop up and what kind of errors should I look for?

Banks and financial institutions hold all the data pertaining to your credit card and loan accounts. They keep track of your payments and pass on the data to the credit bureau. If the information passed on is inaccurate then there might be errors in the credit report. Mistakes in data entry or time lag between data collection, submission and updation of details can lead to discrepancies. These can relate to your personal details for example misspelt name, wrong date of birth, PAN number etc. There may also be mistakes in the balance amount, account status or payment details. More serious errors include inclusion of credit card or loan accounts that you have not taken.

What to do if there is inaccurate information in the credit report?

However trivial or serious an error maybe, you should get it corrected to prevent any negative impact on the credit score. CIBIL has a dispute redressal mechanism through which you can report the discrepancy and get the mistakes corrected.

Fill a dispute resolution form

The first thing that you need to do is to file a dispute by submitting an online dispute form available at the CIBIL’s website. You need to furnish your personal details, the nature of the error and a brief description of the error in the online form. You are also required to fill in a control number. This is a unique 9 digit number that you can find on your CIBIL report. This number aids CIBIL in identifying the report for which CIBIL dispute is raised. Once a dispute is raised you will receive an email mentioning the dispute ID that can be used for future correspondences.

Verification of information

CIBIL contacts the concerned financial institution to verify whether the dispute is legitimate or not. Only after the credit institution gets back to CIBIL with the relevant facts and authenticates the dispute, will CIBIL go ahead and rectify the errors. CIBIL is not authorized to make any changes to the Credit report without proper verification. Only when the loan provider confirms the error CIBIL will update the records with the correct data. You will keep getting email notifications regarding the status of your request. When the dispute gets resolved you will be notified accordingly. CIBIL usually takes 30-40 days to resolve any dispute depending on the time the credit institution takes to revert back with the required information.

If the mistakes in the credit report relate to personal details or incorrect overdue amount then the resolution happens faster.  But in case you find entries of loans or credit card accounts that don’t belong to you, then it is a case of mistaken identity and it may take a little longer to resolve the issue. The law requires the bureau to come up with a formal resolution of dispute within 45 days of the dispute being raised. Once you get the resolution you can apply for the report again to see whether the changes got reflected.

In case you are not satisfied with the resolution provided you can approach the bureau again and initiate a fresh complaint. The information will be re-verified with the bank. Usually CIBIL provides a satisfactory resolution but it takes time to verify and correct the errors. So you need to be patient during the entire process.

 

CIBIL report is increasingly gaining importance. It is prudent to reflect upon it if you wish to have a smooth loan application process. You should check the report at least once every year. If you haven’t done it till now, make sure you do it at least 3-4 months before you wish to apply for any loan. In case you uncover any errors you will have sufficient time to get them rectified.

Be mindful that the errors can lead to depleting your credit score and you may be left with little options but to look for bad credit fix and apply for personal loan with low CIBIL score.

How Can a Free Credit Report Help Indian Credit Users?

Are you planning to get a loan? If your answer is “yes”, then maybe you should take a look at your credit report first. You will be surprised to know how many loans get rejected on the account of a poor credit score.

There are countless Indian citizens who use credit cards, or have a loan under their name, but few realize the importance of their credit rating, which is affected by their credit behaviour. The following are the major credit bureaus of India that provide standard credit reports to the banks for consideration. If you have ever applied for a loan or a credit card, then be sure that your bank obtained your credit report from one of the following credit bureaus:

  1. Credit Information Bureau India Limited(CIBIL)

CIBIL is the most popular credit bureaus of India that the majority of lending institutions are associated with. It was the first credit bureau of India, and had recently partnered with TransUnion, which itself is one of the world’s most reputed credit rating and analytics companies.

CIBIL works along with TransUnion to provide credit reports of Indian citizens to private and government banks, along with other NBFCs. A CIBIL score ranges from 300-900, and is based on your credit usage, and repayment history.

  1. CRIF High Mark

CRIF High Mark is another highly recognized credit bureau of India that calculates credit score on the scale of 300-900, just like CIBIL. While the company is one of the top finance companies in the continental Europe, in India also the company has quite a reputation for its credit calculation and analytics standards.

You can obtain your CRIF High Mark score online for a modest fee.

  1. Equifax

Equifax is a US-based company that specializes in solutions for consumer, commercial, and workforce domains. In India the company works under the name ECIS, which stands for Equifax Credit Information Services Private Limited. It was renamed as the company collaborated with other financial institutions, namely Religare Finvest Limited, Sundaram Finance Limited, Union Bank of India, etc.  Just like other credit bureaus, you can get a copy of your credit report from ECIS online.

  1. Experian

Experian India is a fully owned subsidiary of Dublin, an Ireland-based Experian LLC, and operates as Experian Credit Information Company of India Private Limited. One of the reasons why Experian stands out from other credit information companies, is its proprietary statistical algorithm. This is why your credit score provided by Experian could be quite different than the one provided by other credit bureaus.

All the four major credit bureaus of India charge a certain fee for providing your credit report. However, there is a thing called “free credit report India” too. There are several websites that can calculate your approximate credit score by analyzing your payment history, credit usage, and some other factors that affect your score. While this leaves some room for error, you can certainly get a general idea of where you stand with your creditworthiness.

Here are a few ways a free credit report can be helpful to you:

  • Credit Health: A free credit report allows you to understand your credit health in a simple manner. The standard credit report can be quite complex for an average person to understand, but free credit report is simple and intuitive. Without going into unnecessary details it simply highlights what’s relevant to you.
  • Analytics: With a free credit report you can track your payment history, and your current stand with loan and credit card debt. Using it you can manage your payments accordingly. You can also check the score variation by month, and pinpoint the weak areas thus.
  • Credit monitoring: Of course, one of the best advantages of using free credit report is that you can use it to monitor your score easily. Before apply for a loan or a credit card you can check your report first, and if your score is low, then you can improve it first. With a high score your loan approval chance increases greatly.

If you are looking for an easy-to-understand yet premium free credit report tool, then simply fill out the form at freescoreindia. It offers an almost-accurate credit report which you can refer to if you don’t want to pay for the standard report, or just want something simpler.

Understanding the Basics of CIBIL Report

Your CIBIL report (also referred to as CIR report) is a file that contains the information about your credit history. It contains the details of the current and previous loans that have been taken by you, bank account number, account type, list of enquiries made by banks or lenders, credit limit provided to you, etc. it also contains your basic personal information.

If you want to learn how to correct CIBIL report you should understand its basics first.

Your CIBIL report contains 5 different sections apart from the CIBIL score section. These are:

1) Personal Information

In this section your personal details are provided. Here you can find your name, date of birth, and gender. Apart from that it could also contain the details of some or all of this: income tax ID number (PAN), passport number, voter ID number, driver’s license number, ration card number, and unique ID number.

2) Contact Information

The next section that you‘ll find on your CIR is the Contact Information section. It contains your phone numbers, email addresses, and residential addresses. When a bank checks a CIBIL report this sections helps identity the account holder.

3) Employment Information

The employment section carries your employment details such as your income (either monthly or annual). The mentioned income may not be your current income but the one you provided at the time of your loan application.

4) Account Information

This section is the most information section, especially for your loan lenders. It carries your credit information such as the name of your previous and current lenders, types of credit facilities available (such as credit cards, home loans, personal loans, education loans, etc.), account numbers, payment history, current balance, loan amounts, etc. Most importantly, it contains the detailed record of your last 3 years’ payment history regarding loans and EMIs. All these factors affect your credit score and are also influence your lenders when they consider you loan applications.

Here are some of the things that you should carefully look at in the Account Information section of your report before you apply for a loan or a credit card:

  • Account Details- It contains details such as your name, account number, account type (such as home loan, credit card, etc.), date of account opening and closing, and the latest date when updated information was provided to CIBIL.
  • Account Status- If there are any settlement issues pertaining to your account or if it has been written off by a lender then it would be mentioned in the report. The same goes for when you are on a loan defaulter list. Your future lenders are unlikely to approve your loan application is they will see any mention of such things in your report. For your understanding the definitions of “Settled” and “Written Off ” are given below:
    • Settled: If you report mentions an instance where an account was settled then it means you had made it to the loan defaulter list and the lender had to settle for a lower amount than the outstanding amount.
    • Written Off– When it has been more than 180 days past the due date for a pending bill or EMI then your bank writes off the amount and reports it to CIBIL.

Both the status mentioned above affect your score negatively.

5) Enquiry Information

Whenever a bank or some other institute requests for a copy of your CIR to CIBIL it accounts for an enquiry. The information of the recent enquiries of your report is mentioned in this section. If a lender notices multiple enquiries that have been made in a short period of time then they may see it as an act of desperation and decide to reject your application.

A lot of times people get a low CIBIL score because of errors in their reports.  If you too have come across any error in your report then you can get it fixed and improve your score easily. However, to make that possible you must be able to understand your report first. The information given above will be able to give you a better understanding of CIR.

 

 

What’s In Your Credit Report

Your credit report contains information regarding your credit history. The report shows the kinds of credit that you use, whether or not the bills have been paid on time, status of your credit accounts, loan repayments and the duration for which your accounts have been open. A credit report gives lending institutions a full view of your credit history. Besides this, the report is used by the credit bureau to generate your credit score. Banks and other financial institutions will take credit score and report into account, along with other details, to determine if you are eligible for a loan.

 

Enquiry and account information are two important aspects of your report that are studied in great detail by financial institutions. The enquiry information contains details regarding your loan applications. If financial institutions see multiple enquiries have been made in a short period of time, they will be cautious about entering into an agreement with you. The reason being, multiple enquiries reflect a credit hungry behaviour, which is a put off for lending institutions. The account information section shows details concerning your credit facilities. It contains the name of the lending institution, account number, kinds of credit facilities, loan amount and EMI payments.

 

Besides the account information and enquiry information sections, a CIBIL report will also contain CIBIL score, personal information, contact information and employment information. CIBIL score is a three-digit number ranging from 300 to 900 and the closer the score is to 900, the better. The personal information section contains details regarding name, date of birth and identification proof such as PAN number, passport number etc. The contact information will contain the address and telephone numbers. And finally, the employment section will reveal your monthly as well as annual income.

 

Your CIBIL report will reveal a number of things about you to the financial institutions. It shows the lenders how well you manage finances, if you are financially disciplined, whether you can be trusted with repayments etc. They will determine your creditworthiness by what they see in your report.  Hence it is very essential to maintain a healthy report and a good score. If you get the opportunity to avail freebies such as free credit report India or check my CIBIL score online free, make every use of it.

 

It is important to review your report just like you do for bank statements. Get into the practice of checking the report at least two or three times a year to avoid any unnecessary surprise. By regularly checking the report, not only can you spot errors (if any) and get them corrected, you can ensure that you do not fall victim to identity theft. If you see open accounts that you had nothing to do with, bring it to the notice of the credit bureau and the respective financial institution.

 

The Credit Information Bureau of India, at the moment, does not provide free credit reports. However, according to recent news articles, the bureau will soon begin to provide individuals with one free credit report a year. They are likely to begin doing so by the end of the year, according to news reports.  The purpose behind this is to help people check their scores and raise a dispute if they spot any discrepancies.

 

While you may not be able to avail free credit report India from the credit bureau right this moment, you can check free credit report India from the website of Freescoreindia. Freescoreindia has tied up with Credit Sudhaar to provide free credit reports. I, as a client, can also check my CIBIL score online free through the company website. In order to check my CIBIL score online free, I would be required to provide basic information regarding name, email ID and contact number. The reason why I, as a client, am trying to check my CIBIL score online free also needs to be stated.

 

It is of utmost importance to check your score and report at regular intervals. Hence if you ever see the option to check free cibil report India or check my CIBIL score online free, do not let it go. Be wise and stay updated about what is in your credit records. Striving to maintain a healthy report and a score above 750 will help ensure that you have a smooth financial journey.

 

Why is it necessary to check your Credit Report?

The information in the credit report can have significant effects on one’s financial life. It determines how much money we can borrow to pay for our dream home or car and how much interest is charged on those borrowings. These days, insurance companies also offer discounts based on a person’s credit health. Credit reports even affect one’s job prospects as many employers use it to assess the reliability of the prospective employees.

You should review the report periodically to make sure that the people who are accessing it to take decisions that affect you, get a true picture of your creditworthiness. Flawed credit reports have damaging consequences. It brings down your Cibil Score and costs you a lot of money in the long run in the form of high interest rates.

Here are some reasons why you should make it a practice to check your report once every year.

You are planning to apply for a loan

If you are planning a big purchase and thinking of taking a loan for it, you should first check your credit report before approaching any bank. It will give you a fair idea of your credit standing and provide you clues about you chances of loan approval. A credit report affects the amount of money that you can borrow and the interest rates that you have to pay on those borrowings. If you have a history of late payments, high outstanding balance or collection accounts then the chances of rejection are high. In this case you should first work on improving your credit. An unnecessary inquiry on the report which is unlikely to qualify you for loan will further bring your score down.

 Your loan application got rejected

If a bank denies you loan because of bad credit, you are entitled to a free copy of your credit report from the bureau from where the bank accessed your report to evaluate your credit worthiness. You must request for the report within 60 days of denial. Analysing the report will help you identify the reasons for rejection. It will provide an insight into what habits you need to change to improve your credit picture. If you’ve been handling your finances responsibly and the denial came as a surprise then the credit report may help to uncover inaccurately reported information.

You are looking at rebuilding credit

If you want to recover from your past credit problems, reviewing the credit report is a good place to start. Your credit report contains data about most of your financial accounts. Analysing how much debts you owe and how much is past due will give you a clear focus on how to fix your credit. You will be able to nail down exactly which factors are bringing your score down.

Ensure accuracy

Just as you keep a check on your credit card bills and bank statements to ensure that everything is in order, in the same way you should check the credit report periodically to ensure it is free from any errors. If you find any inaccuracies regarding the amount you owe or any other payment details submit a dispute immediately. Delays in resolving these issues can have a serious effect on the credit history.

 Check for identity theft

Attacks on information databases and identity thefts have become very common these days. You may not even realize that your identity has been stolen for months and years if you do not keep a check on the credit report. It is better to be vigilant about your credit early on because an identity theft can bring an unexpected dip in your credit score and ruin your ability to get loans in the future. Studying the report will help uncover any unusual activity or misuse of identity. If you find accounts that are not yours or transactions that are not made under your knowledge then you may be a fraud victim. Report it to the credit bureau immediately.

Co-signed a loan

If you have co-signed a loan with a family or friend to help them obtain finances then you should keep a close watch on your credit report. Any late payments or defaults on such loan will appear on your report. Periodic checking will warn you and expose problems before a serious damage occurs.

It is better to play safe than regret later. So mark your calendar or set a reminder to check your credit report at least once every year and shield yourself from a lot of risks.

How to get eligible for the highest credit card limit available?

The highest card limit is not a fixed number. It is relative, and differs from one person to the other. Before you ask for the highest credit card limit to be made available to you, it is important for you to know the exact reason for the request. Let’s check a few of the reasons and then see a few simple ways to become eligible for a higher credit limit for the right reasons.

 

What is the number one reason for you to ask for an increase in spending limit? Are you in the habit of maxing out card often? If that is the reason, you’ll be disappointed to know that credit card companies may not entertain your request. The card that has been issued to you is basis a few factors. The issuing company, even those that offer you instant approval credit cards, may have got cognizance of your shopping trends and / or association with clubs, or they have direct sources of information by way of your salary slips. In addition, if you have credit history already, they will have accessed your CIBIL rating online and downloaded your credit history. So, the initial limit on your credit card is a combination of these assessments. Also, it is essential to understand that your available spending limit is a compound of your income level, after taking into account your current debt obligations and expenses. So, if you trying to become eligible for a higher credit limit, have a sound reason, like earning more reward points on your card that will lower the cost of your frequent need for air travel (a genuine reason), or improving your credit utilization ratio, which accounts for nearly 30% of your CIBIL score.

 

The best way to become eligible is to not ask for the raise, but build credibility, as a financially responsible person. Make your payments on time and keep your credit utilization below 30%. If you sound desperate to have your spending limit increased and the card issuer affirms that you are still not eligible, this can impact your credit score negatively, causing a dip. Even if you ask for an increase, don’t bite off more than you can chew. A 10 – 15% increase is still viable, but doubling the limit is well-nigh impossible.

 

More often than not, your spending limit is revised on a periodical basis. If you are accessing more credit on your card and have managed to stay way out of the loan defaulter list, you will be rewarded with an automatic increase in 6 – 18 months of getting the card. However, if your limit is on the higher side, the chances for dramatic increase are, perhaps, limited. In the meantime if your salary has increased or number of income streams has increased, notify your card issuer. They may revise your limit based on the new income reports.

 

The best way to qualify for an increase is also to use your card frequently and showing financial discipline in paying back on time. This is an indicator to the card issuer that not only do you need access to more credit, but you are capable of managing your finances without a problem.  Make sure to pay off within your billing cycle. When your card issuer observes this pattern over a period of time, your automatic increase will be substantially higher.

 

There is yet another way to become eligible for a higher spending limit. It is unorthodox and may affect your CIBIL rating temporarily, but if the objective is to ultimately improve the credit utilization of your credit card accounts, then this may work. If you have two credit cards from the same company, you may want to transfer the limit from one card to the other. This increases your limit and allows you to spend a bit more. However, ensure not to go overboard. Keep the utilization to below 30% to maintain a good CIBIL score.

A good credit score is paramount to staying on the good books in the financial world. It opens a world of opportunities for more credit and loans. However, it takes some financial discipline to be on the high side of 700. Half your battle for more credit is won if you have a good score.

There Is a Big Difference Between Credit Report and Credit Score

This title may seem a bit absurd to you but it is not. Both seem to be similar terms, both are recorded by CIBIL and both are used by lenders to assess your credit worthiness. Yet, there is actually a difference in your credit score and your credit report. It will be easy for you to understand the difference after you have read this article.

Imagine this. You have appeared for an exam regarding your debts taken and how you have used your credit card etc. Your score is the number of marks you have obtained in the exam. Your report gives an account of your performance in words throughout the year, your answers to questions in the exam and also your teacher’s comments. When you apply for a new loan, it is like you have applied for admission to a new institution and the principal of that institution would like to read your previous report card first. She then looks at your score, which are your marks and your answers and teacher’s comments. Based on this she decides whether to give you an admission or not. There could be no simpler explanation than this.

It is true that you may have a score of 700 but your loan application may be rejected due to reasons in your Credit Information Report. While it is important to increase credit score, it is equally important to make sure you have a good credit report backing it.

One of the main difference is that your report contains data for atleast 36 months where as your score is calculated according to past 24 months’ data.

Your Credit Score

Your CIBIL TransUnion Score or, as commonly referred to, your credit score, is a three digit number which is calculated according to a proprietary formula using information given in your credit report under the “accounts” and “enquiries” section. Your credit report is a worded document that holds factual information. CIBIL uses this information to calculate your score. Your score may be anything between 300 & 900. The higher the score, the better it is while the lower the score the poorer it is considered.

Primarily these are the factors that affect your score. They are:

  1. On time Payments: Incase you have a record of always paying your loan instalments or credit card dues on time, then you will be rewarded for your diligent behaviour with a higher score. Details of such payments are recorded in the CIR in a schedule, showing month wise payments you went past due. This schedule is maintained for 36 months.
  1. Unsecure versus Secured Loans: Your score is higher if the fraction of secured loans like home loan or car loan or loan against property, is higher than unsecured loans like personal loan, credit cards or education loans, in your total debt portfolio.
  1. Number of “Hard Enquiries”: Once you apply to use a credit facility, you authorise the lender to withdraw your CIBIL report. Whenever a lender draws your credit report it is termed as a “hard enquiry”. The more the number of such enquiries, the poorer will be your score because it shows that you are constantly in need of more credit and are not able to handle the funds wisely.

A glance at your score is enough for a future lender to make judgements about your credit past. A lower score will make the lender assume that you have not been responsible with your payments, you have more unsecured loans or that you are always seeking fresh credit. How many of such assumptions are true, the lender will find out by reading your report in detail.

A score of “NA” or “NH” means, either your credit history is not six months old or that you have had no credit relationship for atleast the last 24 months.

Your Credit Information Report

This report is the power house of information on your credit history. The CIR records previous information and is periodically updated by CIBIL as per the information received from its members.

  1. Using more credit limit: There is no direct bearing on your score if you use the entire credit limit. But it does impress upon lenders that you may come under huge debt burden by using more credit.
  1. Income to EMI ratio: The thumb rule is that the total EMIs paid by you should not exceed 50% of your Income. Incase you are at a limit of 50% already then lenders will not sanction further loans to you. So even if you apply for a small personal loan and you may have a good score, based on this eligibility criterion, your application may be rejected.
  1. Disputes: Incase you find any discrepancy in your report you can raise a CIBIL dispute. But if you are not happy with your score, you cannot raise a ticket on CIBIL.
  1. Consumer Dispute Remarks: This field has been recently added to the credit report. Here the customer can choose remarks for accounts where a flag has been raised. Such remarks will be available on the report for atleast a year.
  1. Details recorded:
    1. Under the “Accounts” section of your report, the date of last payment, payment frequency (for eg: monthly) and Actual amount paid are recorded for every credit account.
    2. Information about all the loan accounts is maintained under “Accounts” section of your report. Details of total credit limit, sanctioned limit, rate of interest and outstanding balance are all recorded and updated periodically in your credit report. Details of collateral are also recorded in the report.
    3. Information regarding all “hard enquiries” is recorded under the “Enquiries” Section of your report.
    4. Loans on which you are a guarantor, an add-on card holder, status of accounts (closed, settled etc) are all recorded in the credit report.

Summary

The long and short of it is that even if you have a favourable score, you may face a rejected loan or credit card application due to unfavourable factors in your credit report. It is only vital and advisable that you plan your finances in such a way that both the elements are taken care of.

Why You Need to Check Your Credit Report Regularly?

Keeping a check on your credit report is as essential for your financial health as is annual health check-up for your medical wellbeing! Indeed this is very important for managing your personal finances coherently.

When you keep tabs on your CIBIL report, you basically keep tabs on your expenses. You get a snapshot of your financial worth in the form of credit rating and credit score, besides finding out vital financial details such as outstanding account balance, pending credit accounts, credit cards, loans and other bills. This brings out a clear picture of your financial obligations to you. This helps you clearly know your current outstanding and you can accordingly plan for future credit.

You should always check credit report online several times in a year. When you do review the report regularly, you can be rest assured that your report has all the accurate facts and information. There is no discrepancy whatsoever. This saves you from perils of “identity theft” and “raising dispute to improve the score”.

Identity Theft

This is a hideous financial crime against you. You should always be cautious if you spot an unidentified activity or bank query made on your report. In an identity threat someone can use your personal credentials to raise the credit. They may get the loan approved and enjoy the credit while you would be the one who will be liable to pay the dues. If you fail to pay the dues, your credit score will reach bottom soon.

Thus you should always be very careful when you share your personal information with any one. Keeping a check on your credit report helps you identify any nuisance if at all imposed on your name in the credit report.

Identify Disputes

Sometimes your scores fall due to mistakes on your report. Herein you need to raise dispute with concerned authorities and get the correction made as soon as possible so as to improve the score. The sooner the correction is made, the better it is for your credit score. Thus it is very important to keep a check on your report so that any kind of reporting mistake, missed update, or wrong information on your report do not ruin the score for long. As soon as you identify the error, you would get it corrected within 30 days.

There are other benefits of studying credit report as well.

When you regularly monitor credit report you can make sure that your credit score is always positive. With better score you get the confidence for enjoying credit freedom in future as well. That is why your credit score determines your credit freedom. As you are aware of your financial freedom you can confidently contact lenders for the credit and that too, at lower interest rates!

However, if you are looking out to find a loan for low credit score, you again need to monitor your report. By monitoring report, you can correct the bad points in the report and make progress towards credit in future. Checking reports always help you evade bad history and ensure the loan availability whenever desired.

If you do understand your credit report, you can certainly be confident of handling all the disputes yourself, without a professional help. It comes really handy when you want to try different ways to improve credit score yourself. Thus, every person who has a credit history should know how to check free CIBIL report online. One can log on to freescoreindia.com to avail free credit score.

Your report has relevant data about you. It comprises of your loan and credit card repayment details, credit ratio usage, available credit details and every other information about your credit functions. So by monitoring the report you get freedom to analyse your financial obligations whenever you want. This helps you keep track of all due amounts for different kinds of loans and credit cards and take steps to not miss a payment. You can successfully exercise financial discipline by studying your report frequently.

After all, checking credit report is free and you can do so as and when you want. It does not have any negative impact on your rating. Thus always stay informed by checking the report and keep your scores intact.

What are the factors which affect your CIBIL score?

It is not every day that you need to fix your mobile or television or AC or any gadget for that matter. If you follow the instruction manual, and if you are lucky to have a non-defective item, your gadgets will have a long life. Where exactly am I going with my talk of machines and gadgets? Well, the same principle applies to one’s credit maintenance. The credit landscape has advertisements on every bend that welcome you to take the ‘right’ turn with a score that is upwards of 700. Anything short of that, and you have to take more uphill roads to reach credit haven. So, let’s see how you can consistently stay on the right side of 700.

CIBIL gives you a score ranging from 300 to 900 based on a round-up of your credit history. If you have never approached banks or similar institutions for credit cards or loans, you do not exist in CIBIL’s database and you will not have any report to show lending institutions. So, while not having a good score is stumbling block when you apply for loans, not having a credit history is also questionable. It is not that much of an issue if you are salaried or have a steady income and you are approaching credit card companies for the first time. But, it does become a point of contention when your search extends to the best home loans in India. If you are going to be applying for it, your credit report from CIBIL will make the journey much easier. Let’s turn to the top factors to maintain a steady score, so you never have to worry about how you are going to get a loan for low CIBIL score.

Pay your dues on time

When you get your credit card bill for the month, do you stick to paying off all the credit that you have drawn the past month or do you let it roll over to the next month either out of forgetfulness or laziness or just because you have more important bills to pay off that month? If you are doing so, you are hurting your CIBIL rating badly. You would need to show greater financial discipline to score more. Banks exist to make money. They would be cautious about giving loans or cards to anyone who has a history of defaulting his/her payments. They wouldn’t want you to be their loss maker. In this context it must be stated that minor defaults – payments missed under 90 days have a temporary setback on the CIBIL score, while major defaults – those that are beyond a period of 9o days damage your score for a much longer time.

So, paying off dues on time is arguably the most essential trait that could give you a favourable score.

Utilize credit moderately

Every credit card that you have has a maximum limit that you need to abide by. However, that does not mean that you max out your card every month. Doing so indicates that you are credit hungry and lowers your CIBIL score. The other side of the story is that if you utilize up to 30% of your credit limit, you automatically score well in your CIBIL report.

Curb the urge to stock credit cards

Avoid the impulse to decorate your wallet with colourful credit cards – especially if you are thinking of applying for a major loan, like a land mortgage loan, in the near future. Lending institutions view this as an indication that you cannot live within your income and are over-dependent on credit. They are skeptical about your capability to repay any further debts. So, use your limits wisely and let that reflect in your score.

But, don’t be over-cautious about using credit cards

If you own plastic money, make use them regularly. Only be sure to pay the balance off on time (Advice #1). Does that contradict what we just said about using too many cards? Not really. The key to maintaining a healthy score is to using them without excess. Owing a credit card and not using it does nothing to your score. On the other hand, showing that you can keep your debts in control, by paying off dues every month gives you a healthy score. So, go ahead and keep your cards active.