Why You Should Keep Your Credit Utilization ratio within 30-40%

Since years we have been listening to the saying, that spends only that much, how much you can earn. However, over the past few years, he thought has been changing. With credit cards coming into the picture and the availability of them have made it easier for many people to spend even when they do not have that much cash on hand for that moment. Credit cards have made it easier for people to access money when in urgent need. But, there are few asterisks (*) that comes with whatever we peruse. And when it is a credit card, the credit utilization holds the biggest asterisks. Even though the card has a given limit, it is never a good practice to use all of it!

With credit cards comes the credit utilization ration. But that? And what it? Let’s understand this with an example. Suppose the credit limit of a particular card owned by someone is 1,00,000 Rs; then it is advisable to use 30% to 40% I.e. 30,000 to 40,000 Rs max. Credit utilization is basically the amount that is spent on the total credit that is available to an individual of their card. And, the credit utilization ratio is the amount used divided by the total available credit limit. Now, the next question that arises is: why to maintain the ration? When the limit available is more, then why not use more.

A credit score is an answer to that. With many criteria that have their effects on credit score, this one also plays a role. The reason behind is, more the usage, more the debt. More the debt, more it seems that the person is in need of credit. And more the need of credit shows more debt burden. So its a huge chain of logic that have been eventually considered after studying many of the cases. The irony is if you have more than one cards, and collectively if you spend, and exceeds the total limit, 40% would still be okay. So, taking the above example, if there is one more card of the same limit, 1,00,000. and if one uses, 35,000 each card, i.e. 70,000 in total then it is okay. As the total credit limit available is 2,00,000. But, using 70,000 from single card shows credit hungry behavior. Of course, this does not mean that one should keep applying for the cards and use it. Everyone should always check the amount which they would be able to repay if spent before then paying.

Credit score a tricky concept. But easy to understand. More the usage of the credit card will imply that the cash in hand is unavailable. When the credit card is given, an individual’s salary or bank account is checked if they are either salaried or self-employed respectively and only then the card is offered or approved. But many, misuse it. And hence the credit bureaus check the credit utilization ratio. What to do if the usage is more and the limit available is less? Simple, as mentioned earlier, apply for one more card. But, one should not apply for too many cards. Even that states that it is a credit hungry behavior and one is in bad need of funds. Similarly, closing the older credit cards also would impact the score as the older accounts shows the credit behavior one has over these years. And account history is also one of the factors which comprise the credit score. Also, if one does not want to apply for new cards, they can always make the payment more than once a month. When the usage seems to exceed 30%, make a payment and revive the credit limit!

The moral to all this is, anything used on average is good. May it be the credit that is available! Using 30% to 40% of the total limit available over the credit card shows a responsible behavior. And that also maintains the score!

Advertisements

Use Secured credit card to Repair CIBIL score

If you have recently ordered your CIBIL report and found that you have a low CIBIL score, it is time to take charge of the situation and work towards improving it. Banks and financial institutions avoid issuing credit cards or lending money to individuals with a bad credit history. They pay a lot of attention to a person’s credit worthiness to avoid any risk of defaults. So a good CIBIL score plays a crucial role in the lending approval process. Many banks have cut off limit of a score of 650 -700 below which they reject the loan application.

In order to repair CIBIL score, one needs to prove that one can handle credit responsibly. For this one needs to make timely payments of loan instalments or credit card bills every month. But with a low CIBIL score, it would be hard to find a bank that trusts you with its money, or is ready to take the risk of lending to a person with a bad credit record. At such difficult times Secured credit card is a way out of this vicious cycle.

A secured credit card, works like any other card offered by numerous banks. The only difference here is that it requires one to keep a fixed deposit with the bank. The deposit amount then determines the credit limit that the bank offers on the card. So essentially, the bank does not face any risk of default. If the card owner does not pay his credit card bills, the deposit amount kept safe with the bank can be used to recover the amount.

Let’s look at some more features of a secured credit card

  1. Usually you do not earn any interest on the fixed deposit amount. You cannot close the FD till the time you are holding the secured card. Foreclosure of FD leads to cancellation of the card along with payment of applicable fees. After a year or two of responsible payment patterns, one can request a conversion of secured credit card to a normal card.

  1. There is very little documentation required to get a secured credit card. Generally all you need is an ID proof.
  1. The difference between a secured credit card and a debit card is that the secured card activities are reported to the bureau.

How does using a secured credit card repairs CIBIL score.

Timely payment of card bills is the most important prerequisite that is needed to build your credit score, through this process. The bank reports the payment behaviour to all the three credit bureaus. The payment details get recorded in your credit report and that forms a basis of your score. Since the payment history makes up 35% of your score, working on this aspect definitely gives a big boost to your score.

Remember, not using a secured credit card responsibly can bring down the score even further. So make sure you do not make any late payments, and do not default on them either. Do not use more than 30% of the available credit limit. A high credit utilization ratio pulls the score further down.

A secured credit card is a good option not only for people with a low credit score but also those whohave just started their journey of building credit. People with a lower monthly income, than the minimum income set by bank for issuing credit card can also use a secured card. Various banks like HDFC, Axis Bank, ICICI Bank, Dena Bank provide this facility. These banks allow a credit limit of 50% to 100% of the fixed deposit amount. But before you apply to any one of these banks for a secured credit card, remember to set your expectations right. You will not see overnight results. Just like all efforts take time to yield results, building a score also requires patience. It may take a few months before you start seeing any results. So you need patience and determination to start your journey. All the best !

5 Steps to Clear Old Debt from Your Credit Report

It’s nearly impossible to enjoy a perfect financial life in which you don’t miss a single loan EMI or a credit card bill. Most people make a slip at least once in their life. However, the good news is that your bad debt or past financial mistakes are automatically removed from your credit report over time.

If it’s been a long time and your old debt hasn’t been removed from your free CIBIL report, then you can take the following steps:

1. Compare Multiple Credit Reports

There are many credit rating agencies in India but only 4 of them are at the top and referred to by the majority of traditional banks and NBFCs. These are CRIF High Mark, Experian, CIBIL TransUnion, and Equifax. You can compare them to identify the one that’s showing the old debt.

2. Contact the Concerned Credit Agency

Now that you know where the problem lies, you can contact the appropriate crediting bureau directly. Fortunately, all the top credit rating agencies allow the users to raise disputes through their websites in a convenient and simple manner.

3. Contact the Bank

You must also contact the bank which submits your financial details to the credit rating agency. Sometimes, they submit wrong information which results in a poor score or a bad remark on your report. In this case, they may fail to report that your old debt has been cleared.

Taking the case up with your lender can easily resolve the issue if they find out that the fault was on their side.

4. Approach the Upper Management (Optional)

If you have obtained a satisfactory resolution with your bank, then you can skip this step. However, if they haven’t done the needful or are simply unresponsive to your concerns, then you can send an email to the head branch. You can visit the official website of your bank and raise the issue there.

You also have the option to pay a visit to the banking ombudsman which acts as a quasi-judicial authority that was created to provide resolution of the complaints of banking customers.

5. Wait for the Changes

After the mistake has been acknowledged, the changes will be visible over a period of a few weeks. This is because the credit rating agencies update the records periodically. In most cases, you shall be able to see the bad credit fix in your report in a month or so.

Preventive Solution for Old Debt Damage

If you want to protect your credit score from unwarranted damage due to carelessness on your bank’s end, then it’s important that you check your credit report from time to time. This will allow you to check for issues like old debt, wrong repayment information, discrepancies in personal details such as name, address, bank account, etc.

All the credit rating agencies in India are required to offer the customers one free credit report every year. So, there is nothing stopping you from getting your free CIBIL report today! You can simply visit CIBIL’s official website, create an account, answer a few questions for verification, and that’s it! They will send your report to your email address within minutes!

Monitoring your credit report is also beneficial for the following reasons:

Identity Theft and Frauds

Identify thefts and financial frauds are still rampant in India. The main reason behind it is the lack of awareness. Most people realize about these only when it’s too late. However, by monitoring your credit report on a regular basis you can identify anomalies such as unrecognized bank accounts or credit card accounts, unfamiliar loan inquiries, etc.

Healthy Credit Score

By checking your credit report, you can monitor your credit score changes. So, if you notice your score dropping, you can take appropriate measures to bring it back to the normal level again.

Discrepancies

Mistakes in your personal information and credit information can lead to a poor score. However, by identifying these mistakes and getting them corrected, you can easily prevent the damage.

When it comes to credit management, then the majority of problems can be averted or resolved by simply knowing the right plan of action. In that regard, this blog can be of great help. Good luck!

 

Which Credit Score I Should See?

In the world of finance, you see a lot of products like loans, credit cards, Insurance, mutual funds, hedge funds, etc. if you dig into each category, you will find a lot of sub products which would support its title. That is just tip of the ice berg. When you dig deeper, there are financial products you won’t even understand.

Let us take an easy example of credit cards for instance, if you apply for one at a particular credit card vendor, you will be given a lot of credit card options like silver, gold, platinum, etc. In these categories as well there will be different terms for different cards with different benefits and different rewards.

Just like any other financial product, there are types of credit score as well. Yes, we are right! There are many credit bureaus who record your financial transactions with them and when demanded by you or a future lender they produce the report.

Now you would be thinking, how many score do I have and how should I understand if which credit score should be referred for my financial transactions? Do not worry; you are not alone to get this question in your head. As many of us are clueless on what is a credit score? How is it important? How many of them are there?

We will answer all these questions here,

A credit score

A credit score is a number that allows the lender to judge your financial standing. With the help of a credit report the lender can see and gauge how you make your payments and if you are making all your payments on time. If you have a better credit history, you will act as a hot lead for loan lenders in the market.

How is it important and how to improve your score?

Every individual has a credit report, loan lenders in the market always seek people with good a goods score so that they can lend money with ease. Not only in terms of loan but a good report can help you land at your dream job; get you a fancy house for rent and many more. The credit score is making its way out of financial market and entering into common grounds as well in terms of verification process.

If you monitor your credit report from time to time, you will know where you stand and this can lead you to act on improving your score. Just make sure, you make all your payments on time, use less debt, have variation in loan accounts and do not close any existing credit lines. For example, if you have a chance to close your car loan, try to close it as it will save you a lot of money in car loan interest rate but do not close your credit cards. The older credit cards you have the more you have chances to get your score up in no time.

 

How many are there?

As mentioned earlier, there are many credit score available with different bureaus in India. Credit bureaus like Transunion, Equifax, CIBIL, etc. are the main players in this business. As far as Indian lenders go, they prefer getting CIBIL report for your verification purposes. If you are considering one score, you should consider CIBIL.

Their scoring models are entirely different from one another and the score range also differs. This is one particular reason why, every lender just sticks to one credit report which then makes the process easy for them.

Even though you might think, you only have one credit score to monitor, you are wrong. You have a dozens of score which can give you different credit rating and get you confused. Instead, just focus on one and if necessary two for your reference. Check with your bank which credit rating they prefer and start monitoring the same, because in future if you are considering a loan, you will go to your home bank first.

Know the rules to repair your credit score quickly

When I am in the need of some cash liquidity and suddenly the loan gets rejected! What a nightmare. No sign of any help. can’t approach any of friends or relatives as my principals do not allow me. My credit card limit has been exhausted and I am just left with some hard cash with me. When I am thinking about the reasons for the rejection of my loan, I take all the minute details and rewind it in my head. Where did I go wrong?

The first thing I encountered was my credit score. My loans were getting rejected because my credit score was low. But then I thought, I have not taken any loan to date. Why is my credit score low then? All my information is correct. No identity theft issue with my report. I pay my regular credit card’s bills before the due date. I have always been the most responsible payer. I have no add-on cards which can make a possibility of default. While I checked my report, checking all the details, I came to know that while I was too young in my early 20s, I had applied for the credit card. I never used it but the yearly charges kept on adding and have become a huge default. Oh, Freak. How come I never noticed this? Now, when I am in a dire need of cash, all I am facing is rejection from everywhere. Just because many years ago I applied for a credit card and never bothered if it existed!

The above saying is of Amit, a responsible payer! What went wrong in his case? When we apply for a credit card, they have some annual handling charges. The amount can be as minimal as 500 Rs. But that matters. When we do not pay that amount, surcharges are added to it. Interest keeps on adding to it. And then it’s considered a default. Suppose when this gets to our notice, we clear out the outstanding without even settlement and pay the complete amount. The card is then closed. But what about the credit score? How soon will it be changed? When will the score go up? When will mistakes be removed?

When trying to increase CIBIL Score, always remember one thumb rule. Nothing changes overnight. Neither was a dip in your score overnight. Nor will increase in your score overnight. We have to be patient while any of these process. There are few of the options which can be used to make this process a little quicker. But again, nothing happens too quick.

  1. Secured Credits for short term
  2. Secured Credit cards

One of the easy and fast way to repair the credit score quickly is secured credit card. A secured credit card is the one where you keep an amount of money as a fixed deposit. You can use your credit card as normal. And pay when the bill is due. Supposing you fail to pay the bill on the due date, your bill amount from that fixed deposit amount will be deducted. When this process is done without any errors for few months, it shows your credibility and also how responsible the borrower is. Which helps in getting the score up in short span.

  1. Gold Loan

One more type of secured credit for a short span is a gold loan. Get the cash against any of your gold ornament for short span. Be a responsible payer, and keep paying the EMIs on time. Withing a very short time compared to others, your score will start boosting.

  1. Unsecured Credits for a short span.
  2. Credit Cards

When using normal credit cards, make sure you do not miss any payments. Use 30% – 40% of your credit limit. Even when you have the capacity of repaying the full credit limit amount, do not have this practice. It is a major mistake which people make. When more than 40% of the limit is used, causes a dip in the score. Make sure this is not the reason for your bad score. When the correct amount is used and repaid on time, even this would get the score up!

  1. Personal loan

Take a personal loan from either a Bank or NBFC which is for a short span. If any dues remaining of the previous loan, try clearing out all of them as soon as you can from this loan and parallelly pay this loan’s EMIs as well!

 

If done patiently and diligently, there is no scope that your score will not increase. Patience and Responsibility are two main things one has to keep while they are in the process to increase CIBIL score. Do not worry as there is a solution to everything!

How I got 800 credit score without any loans

Credit Score becomes an important aspect when it comes to taking loans or getting a credit card. Today, we have the facility to buy or get something which we once had thought of buying few years down the line. A vehicle, a house, a property or the higher education, anything can be conquered by taking a loan today than tomorrow. With few percentages of interest which you have to give it to the bank, you have the access to that amount of money much earlier than today! These amounts are quite big. When we talk about small amounts gold loans and credit cards are perfect examples.

As your score is majorly the reflection of how credit healthy you are i.e. how responsible are you for paying the credits you have taken, would determine the worthiness. When one had not taken any credit say in terms of card or any type of loan they do not have any score and is called a No History customer. And suppose one has taken any type of credit and when he/she pays the EMIs on time, is when the good score is built. But, what if one does not want to take any loan but still wants a good score? What is a good score? Any score which is above 750 of the range of 300-900 is considered a good score.

Let’s understand what Sahil has to say in achieving 800 scores without taking any loan!

Hi, I am Sahil from Delhi. I wanted to buy a new house. When I went to axis bank and inquired for axis bank home loan, to my surprise they asked me to first build the credit score. I had never taken any loan in past, neither did I owe any credit card. I am with dad in his business and never had any chance to go and take any kind of credit. I went home back and researched. How can I build my score?

Let me share my secret of getting 810 scores without any loan. So I read all the parameters of how the score is calculated. The 5 parameters viz. Payment History, Amount Owed, Length of Credit History, New Credit and Types of Credit. which makes the score was my whole Idea about how I was supposed to go! So I first started with a credit mix. I applied for 2 types of credit card. Secured Credit Card and the normal Credit Card. After a few months or regular use and payments, I applied for one more card. I made sure that I do not overuse my credit limit. I never used my card for more than 35-40% of its total limit.

The credit score is then achieved and reflected in the bureau report after 6 months. I checked my free credit score to make sure that what I was doing was correct and error free. I had maintained a good record and kept working on the same lines. In less than expected time, I was rewarded with my own hard work and efforts. My score was 810 and too without taking any kind of loan!

With Sahil’s experience, one thing what we can take is always to try working on the major 5 parameters of the score which determines it. Try paying the amount which is due on time, take credit but repay, do not take undue advantage, do not close old accounts, keep applying for new credits but do not act credit healthy and lastly have a good mix of secured and unsecured credit with a fixed or revolving type of credit mix. A healthy score will be no away from you!

My Credit Score Disappeared! Please Help

Is it possible for a person to have no credit score even when a few years before he had an excellent credit history? Can this change happen all of a sudden? What should one do if one finds himself in such a situation? Let’s get the answers to these questions.

As you may very well know by now, the credit score is a number that is generated based on the information that is recorded on your credit report. If you own credit cards or have taken some debts, then the lenders keep updating the information relating to your accounts to the bureaus. An impeccable payment history and a low credit utilization helps in raising the score. Information relating to late payments, too many debts, high utilization ratio brings the score down. But whether the information reported to the bureau is positive or negative it eventually falls off the credit report. In order to ensure that new positive information keeps getting added to your report you need to keep your credit profile active.

There may be situations like the ones given below, due to which your credit report wasn’t updated with new positive information. If such is the case, your score would show a downward decline.

  1. Overseas- If you travelled abroad for several years and closed all your credit cards and other debts before leaving, your credit history will start fading away. Credit bureaus in India only record information relating to accounts opened within the country. So if one plans to return back after a few years, and wants to maintain his CIBIL score, he must keep at least 1 account open and active, by charging few expenses every month and paying the full balance at the end of the billing cycle.

 

  1. No credit- If as a part of a debt management program, you decided to go all cash and stopped using credit cards or other debts, your credit score will start falling after a while.

 

  1. Using spouse’s credit- If after marriage, you closed all your accounts and depended only on your spouse’s credit, your own credit score will disappear over time. Without a good score, you will have a tough time getting approved for credit, in case you require it in future.

Check your free CIBIL report from the three credit bureaus and find out what your current situation is. If your credit score disappeared due to these reason, don’t despair. There are many ways to rebuild your credit history once again. But you will have to get back to taking loans and using credit cards. Here are some credit building ideas which can help you establish a good score once again.

  1. Secured credit cards- Without any credit score it may be difficult for you to get approved for usual credit cards. But in order to display good credit behaviour one needs to have an active account. A secured credit card is a good way to get a small credit line. You need to make a deposit to get this card, which basically serves as a credit limit. The deposit shields the card issuer from any risk of losing money due to non-payment of dues. Make regular on time payments on this card to ensure positive information gets recorded in your report. With a good payment history and low credit utilization you will see a raise in your score.

 

 

  1. Personal loans for low CIBIL score

Another way to build up on credit history is to take an instalment loan like a personal loan. There are many private lenders who given personal loans even to people with a low CIBIL score. They charge a higher rate of interest to cover up for the extra risk that they take to lend to individuals with a low score.

  1. Authorized user

If you become an authorized user on someone else’s card, the account information will be recorded in both the credit reports. On time payments and low utilization maintained by the primary card holder will benefit your score as well.

If you do not have any new account reported in the past 6 months, or an open credit account that is older than six months, your credit score will start declining and slowly disappear. That is why it is always recommended to keep old accounts active and open.

Will All The Credit Score Check Hurt Your Score?

There will be a lot of articles available on various websites which would give you a lot of information on how credit score works and how to maintain it. What many websites do not inform you are how your credit score gets hurt and what the factors which hurt your score? There are many factors which influences your credit score, building the credit score is rather hard than one mistake taking it for a toss. Your credit report will give you a clear idea on how you are doing financially and how other banking institutions look at you in terms of credit worthiness.

Imagine you are about to book your dream car, you have managed to save some money for down payment of your car. You are thinking of getting a loan as supplement for your vehicle purchase. Now, you are not sure what your credit rating is and if the credit report will help you get an auto loan. You plan to do a cibil score check before you apply for a loan but one of your relatives stop you from doing it explaining if you check your credit report you may end up hurting your score. You have less time to think about it and your dream to purchase that car starts to fade away. What would you do? Will you take the risk and check your score? Will your personal inquiry on your report hurt the score? Is yes, by how much?

There will be a lot of things which would run in your mind, especially when you have different opinions getting thrown at you. Do not worry, we are here to help.

First of all, let us just understand what influences your cibil score and what their shares are.

These are the main factors which influence your cibil report,

  • Your payment history (35%)
  • Number of debts (30%)
  • Age of your credit (15%)
  • Types of credits on your account (10%)
  • Credit inquiries (10%)

Yes, Credit inquiries have some weightage to your report, but this can hurt your chances of getting a loan harder than any other factors mentioned above.

There are two types of inquiries,

Hard Inquiry vs. Soft Inquiry

Hard inquiry

Whenever you apply for any type of loan or a credit card, the banks or the Non-banking financial corporation conducts background verification on you. With your residential, professional verification the lender also conducts verification on your credit report. Every inquiry made on your cibil report by the lender is termed as a hard inquiry which hampers your cibil score and you may end up with low cibil score. A hard inquiry stays on your report for 7 to 10 years which can be seen by your future lenders. If there are multiple inquiries made on your cibil report at short span of time, the lender may deny you a loan thinking you are not credit worthy this is why the past lenders did not sanction you a loan.

So the next you get a call from various credit card telesales department, understand that your yes to them will lead to hard inquiry and we all know the credit card companies are always strict in terms of verification and may deny you a credit card. You may end up having a hard inquiry on your report without a credit card in hand.

Soft Inquiry  

There are many individuals who know what the importance of having a good cibil score is. Many people check their credit score from time to time just to evaluate how they are doing financially and if they are credit worthy for future. If you, yourself are inquiring about your credit report, it will be termed as a soft inquiry. This inquiry also stays on your report for a very long time, but the lenders don’t mind soft inquiries. These days, there are corporate companies who check your credit report to check how you manage your finances so that they can offer you a job.

It is important to check your report from time to time so that you are ready with a strong report whenever there is a need of urgent loan in family. Not only for financial purpose, a strong report will help you in many ways in life.

Will Arranging My Debts Help Boosting My Credit Score?

A credit report provides a comprehensive picture about one’s credit position. The credit score which is an important part of the report factors in various variables when calculating the score and this rating helps in predicting an individual’s creditworthiness. In case you have a low score then there could be a variety of reasons for it and depending on the problem you can solve it using various solutions. Arranging your debt can help you in boosting your credit score. Let us consider a few ways in which arranging yore debt can give a boost to your credit score.

  • Consider Balance Transfer:

Balance transfer is an option that can help in better management of debt. This option can be useful both for home loans and in case of piled up credit card debt.

Home Loans run for long tenures and it is possible that during this time the interest rates change a couple of times. If you realize that the loan you took years back is at a higher rate than the current prevalent rate for home loans in the market then you could consider getting a home loan balance transfer after weighing the costs and benefits. A lower interest rate could help lower you over all liability and you may find it easier to pay your reduced installments in case you are struggling with the repayment. Longer loan tenure if agreed by the new lender can also help you in repayment.

Credit card debt is the most expensive form of credit. If you are struggling with repaying your credit card dues then balance transfer could help you. In this process you transfer your unpaid dues on one card to another card (preferably one that charges a lower interest rate), the new card company provides some interest free holiday before you need to start repaying your dues which can help the card holder. The acquiring card company may also allow repayment in EMIs which can help in boosting your score.

  • Fore-Closure Could Help in Certain Cases:

All loans and credit card dues are included in the CIBIL Report, one aspect that influences credit score calculation is the balance between secured and unsecured loan. In case your unsecured loan (personal loan, credit card dues) burden is higher than secured loan burden then it could impact your credit score negatively. In such a scenario fore-closing these (unsecured) loan could help in boosting the credit score. Though loans that run the full course are better for the credit rating in the long run but in some instances a prepayment may help.

  • Prioritize your Debt

Needless to say repaying all your dues on time and regularly is important. However if you have too much debt and are struggling with repaying them then you must consider prioritizing the repayment. Repaying one which has the highest interest burden could be a good way to start. However it is important that you list out all your debt along with their interest, overdue amount and remaining amount. If you find it tough to repay all you monthly dues then you could talk to lenders and request a loan restructuring. Here the loan tenure is increased which lowers the EMIs and makes it easier for you pay your monthly dues. You aim should be not to allow interest fee and penalties to add to your debt burden. This is definitely not one of the ways to improve credit score fast but could give you results in the long term.

Ideally one should not reach a position where their debt burden becomes so high that they find it difficult to repay their monthly dues. However in case this does happen then you should consider rearranging your debt in an attempt to better your credit rating.

Is Free Credit Score A Scam?

It is the season of scams so it is no surprise that we take everything with a pinch of salt especially so if the promise is to get something free. In September 2016, Reserve Bank of India made it mandatory for the credit agencies to provide a free credit report to individuals once in a calendar year.  There are four credit agencies in India so you can get four credit reports in a year which makes it one in each quarter. Each credit bureau has a different process giving you a free credit report when asked, so let us go through each agency’s process and understand if free credit score is a reality or a scam?

How to Get Free Credit Score From Various Agencies?

Checking your credit report from time to time is recommended as it lets you assess your credit health. Since there are few ways to improve credit score fast, it’s better to be prepared in case you need credit and stay credit healthy. With scores available now without you having to pay anything now it’s easier to access your credit score without having to pay anything.

Below we discuss in brief how you can get (if at all) free credit score from various credit agencies:

Experian: For those looking for a free credit report from Experian, you need to follow the link that lets you access your free credit score.  Few basic details like name, Permanent Account Number, email Id, date of birth need to be entered for you to get the report. You will be sent a voucher which is to be used when you are taken to the payment page instead of making an actual payment. This voucher is mailed to you within 48 hours of you making the request for a free score. After you answer a few questions you would be sent the report within three to five days.

Equifax:  They provide the free report only after you download a mobile application which is available for both Android and IOS phones. You need to provide basic KYC details along with you Aadhaar Number. The applicant is provided a temporary PIN that is used to authenticate themselves and then they can login after 24 hours. After answering a few questions about your credit history the report is sent to you.  If you do not have a smart phone then there is a separate process for getting the free report. Those without smart phones need to send scanned documents along with an application to the given email id , documents required for this include address. Getting the report through the application make take two days, if doing it through the email route it make take longer time.

CRIF High Mark: They have a link on their homepage for getting a free credit report. Those desirous of getting a free credit report need to fill in some information to authenticate themselves. Information required here is more derailed as compared to other agencies. Once the application form is filled and the customer information is authenticated they can download the report. The report is generally available within 48 hours.

CIBIL TransUnion: Initially CIBIL had the option of submitting only a physical paper based request but now both options of getting it online or physically are available. For getting it online you need to fill in the required information after following the link that is provided for getting a free score. Applicants need to authenticate themselves before they can download the report. If all the steps are completed successfully the report can be accessed within a couple of minutes. For those who choose to send the documents physically, it may take them seven working days to get the login details. Once these details are received the applicant can login to the site and can access their report.

So all in all getting a free score is not a scam. In some cases it may be time consuming or the applicant may find the process cumbersome but usually they can access the free score even if it takes time and some effort.