Credit Monitoring and Age: Are They Related?

With a significant rise in the cases relating to data breaches, data theft and identity theft there is a pressing need to take precaution and protect one’s credit record from such malignant activities. Credit monitoring is a defensive mechanism that aims to prevent, detect and resolve such kind of credit frauds.

Credit Monitoring essentially implies keeping track of an individual’s credit history and identifying any suspicious changes or activities. There are many companies that offer credit monitoring services and also provide you with a free credit score and report.

They notify the person whenever there is any new information in any of the credit reports like a credit inquiry, addition of a new loan account or delinquency. Such alerts enable the person to verify whether the changes made are genuine and accurate or not. If such developments are not initiated or authorized by the person then he can take necessary action right away to sort the issue before it becomes out of control. It reduces the chances of identity theft or any other kind of fraudulent activity.  It is an easy way of keeping a check on one’s credit health and score. These services also help in resolving and mitigating the damage if your account is breached. They also come handy if one is trying to improve credit score. Many credit monitoring companies offer an additional service of providing loans for low CIBIL score. Investing in such services is surely worth it as protection from fraud gives one peace of mind.

But should you think of signing up for such services at a particular age. Well ask yourself; at what age do you think you will be vulnerable to become a target of identity theft. It could in fact be at any age. Young and old, both are equally susceptible to become victims of identity theft. Thieves do not have any age preference. They are only concerned with making profit by using someone else’s personal information. Hence monitoring credit is extremely important irrespective of one’s age. It will alert you if there are any signs of your personal information being compromised.

Let’s see how credit monitoring helps in the young age when you start building your credit. Credit reporting errors like incorrect spelling of name, address, incorrect payment transactions are very common. These errors can do a big damage to your credit score. It is necessary that you get these errors corrected. But without proper monitoring, you will not even know that such errors exist.

Credit monitoring services also help in credit repair. They grade you on each of the factors that determine your credit rating. This helps you to identify your weak areas so that you can work upon them and improve your credit score. They guide you about what financial approach you should take so as to improve your rating. They also provide you with free credit score , so that you can track your progress on a regular basis. So if you wish to take a loan in the near future you should definitely think about approaching a credit monitoring firm, whatever be your age.

In old age financial aspects start taking a backseat, and people become less worried about their credit standing. But beware, the older generation is an easy target for the identity thieves. With high savings, big assets and excellent credit scores the senior adults become the perfect targets for criminals. So they too need a protection from such crimes. Lackadaisical attitude can destroy their impeccable credit history that took years to build. If a thief opens a fake credit card account in their name and starts charging purchases to the card without making the payments their score will plummet. Without proper monitoring, they may not even notice such activities for many months or years. With credit monitoring one can be alerted each time a new account is opened in one’s name. This way one can sort out things before they go out of hand.

Maintaining a good credit standing will give you better access to loans in times of need. You can obtain the best credit card reward offers and interest rates. Hiring a credit monitoring company can also save you from becoming a victim of identity theft. Hence monitor your credit reports and scores on a consistent basis whatever be your age.

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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.

Should You Check Your Credit Score?

Credit score was something that was unheard till almost a decade and a half back.  Now it is not only discussed occasionally but it has become almost a necessity if one wants access to formal credit. If one were to approach any bank or financial institution for a loan the first thing that the prospective lender will do is get the applicant’s Credit Information Report (CIR). All financial institutes access the CIR when they want to assess a prospective client but you as an individual if you want to see how your credit health is or you want to know how to boost your credit score by looking at the grey areas in it then should you do it? Will checking you CIR have any impact on it? Is it a good idea to check your score? Well if you have any doubts the ensuing discussion is just for you.

 

Hard Enquiry V/S Soft Enquiry

To understand whether checking one’s credit rating impacts it in any way let us understand the difference between a hard enquiry and a soft enquiry. When a Financial Institution or a bank ask for the CIR of an individual it is known as a hard enquiry and as the chart alongside shows it has a 10% bearing on the score calculation.  When an individual checks his/her credit score then it is known as a soft enquiry and has no bearing whatsoever on the calculation. So checking your own score will not impact the credit rating unlike a hard enquiry; too many enquiries can impact the credit rating adversely. In fact one has the option of getting a free credit score also; you should check you score from time to time owing to the reasons explained in the following paragraph.

 

Why Should You Check Your Credit Score?

Now that we have established that checking your own score does not impact it negatively let us focus on why is it beneficial to check your own score periodically. Let us assume that you want to buy a new car during the coming festival season and you apply for a car loan; the loan application is rejected due to a low CIBIL score and you end up missing the special discounts.

Checking you score from time to time makes your prepared for a situation when you may require a loan in the future and beyond loans also if you apply for certain jobs. Yes! You read it correct a poor credit rating could hinder your job prospects too just like it hinders the borrowing prospects. Recently in their recruitment advertisement SBI had asked applicants to check their score before applying. If the rating is low due to some reason, being prepared in advance gives you sufficient time to try and increase the score and be ready to apply for a loan and a job too.

Accessing you CIR also gives you a comprehensive picture of your financial health. Thus beyond loans it could help you in financial planning and also course correction if you are too over leveraged, are late in making payments or there is some unpaid due which you have forgotten about. Looking at your credit report you get a summary of all your open loans, their remaining tenure and so on which can help you prepare for your future. Sometimes there may be an erroneous reporting in the CIR which may impact the score negatively although you might not be at fault. An occasional look at the CIBIL Score can warn you of such a situation and you can take timely remedial action.

So to answer the question asked at the start of this discussion; yes one should check their credit score. Checking you score in no way impacts it negatively; on the contrary it can help you by being prepared to deal with any situation and can also aid in financial planning.

The Importance of Your Credit Score When Looking For a Home Loan

Real estate prices in India have scaled to unbelievable heights. Buying a house, atleast in the major cosmopolitans in India seems like a distant dream for most especially because the prices have exceeded a common man’s affordability. Inspite of the recent trends in property prices in India showing a marginal downturn, they still remain far above the ground.

To cover the gap between what a common man’s pocket can allow and what home sellers are asking for, a home loan must be sought. This article will quickly walk you through on why your credit score is such a big deal when you are looking for a home loan.

How to proceed when looking for a home loan?

It is important to mention here that banks and other non banking institutions that provide housing loan and are also member of CIBIL, withdraw a loan applicant’s credit report as a first step in evaluation of the loan application. Whether the applicant is seeking a secured debt or an unsecured debt it does not matter. Even for a thing as minor as a request for an upward revision of the credit limit on your credit card, sends a bank looking for your credit report. Most banks and other lenders are known to grant credit to those who have scores greater than or equal to atleast 750. Thus, what’s applicable for any other loan is applicable for home loan too. You should do a cibil score check every year to keep a eye on your score.

Banks and other non banking financial institutions do have their internal policies on credit scores and reports but none of them have ever openly disclosed their criteria. However, by and large 750+ scores are considered as very good score to get through the loan process at any bank, unless you lack a document or fail on other parameters of the lender.

How do I know my score?

Knowing your score is not complicated at all. You can get online and go to cibil’s website . Here you can request your copy of CIBIL report. After a payment of Rs. 550/- you can easily and instantly get yourself access to your score and report. Incase you do not want to invest money in withdrawing your report then you can also go to http://www.freescoreindia.com and request for a free credit score. Although free but you will receive it only three days after you have submitted a complete request. So, if you are not in a hurry, you may consider this alternative.

I know my score, now what?

Once you have received your copy of the report then give it a thorough look. Look at all the details carefully and make sure that they are all correct. Incase you find any false information then it is best to raise a CIBIL dispute and request for a rectification. The reason why you should be so cautious about all the details to be right is because there could be information that is hampering your score. Upon correction of that misleading information, not only will your score improve but also it will become easier for you to impress upon your prospective lenders.

For example, you may have paid in full an old used car loan some time ago but the lender has not reported this to CIBIL. However, the report shows the loan account as still “open” and running. Since CIBIL’s authority is limited to only collating data from its various members, it cannot update unless it has been notified from the bank itself. Thus, by having your data corrected, it will bring down your used credit limit and help increase your score.

I have a good score. Can I use it to my advantage?

Ofcourse! It may come as a pleasant surprise and it is true. Often we have heard that people with poor scores need to worry and not those with good scores. But that is so untrue. The truth is a good score helps the borrower more than the lender. This is so because it not only it means that you can easily seek credit upto the limit of your eligibility but also you can negotiate for favourable terms and a lower rate of interest. Banks and other lenders will be vying for your loan portfolio incase you have a good score. Therefore, you can certainly take advantage of competitive rates.

Are there any loans for someone with a poor score?

Well, ofcourse. Even with bad credit home loans can be acquired. There is a good chance that you may have to pay an interest rate higher than standard rates or you may have to get a guarantor on board or perhaps, get someone with a good credit standing to co-sign your application, but you certainly do not need to deprive yourself of a home loan.

Incase, unfortunately you do not hold a good score then do not lose heart. You can adopt credit healthy ways and work on improving your score. We have covered on our blog on how you can repair your broken credit.

Rejuvenate the power in your credit score

Like they say, “better late than never”.  Despite a poor score, by bringing discipline in your finances and making a fresh start will help you achieve a better score over a period of time. Avoid being nonchalant about your score, have patience and work on it actively. Once better then go after that loan you always wanted.

There may be chances that you do not have the skill required to negotiate on interest rates or you do not understand how you can bring in discipline in your investments. In this case, you must seek expertise of credit consulting companies who can do this job for you. Find comfort in the company of an expert and follow their advice.

Stay tuned for more credit updates!

Important tips for first time home buyers

Congratulations! Now that you have decided to take that all-important first step towards purchasing your long-dreamt of asset – your first home – it’s time to look into all the details with a magnifying glass. It is no doubt an exciting prospect, but it can be overwhelming too, if you do not walk into the loan buying process adequately armed.

Let us quickly walk through the must-dos that every first time home buyer should evaluate before signing on the dotted line.

Check your credit score – A very critical aspect of the home buying process, this vital piece of information can often be the reason for your application to be reviewed favourably or otherwise. A high credit score typically translates into a loan at the most competitive terms, and can mean that over the long term you wind up saving a significant chunk of money. It would therefore be prudent to do a cibil score check and call for a copy of your credit report and know where you stand and if required, take adequate steps to better your score.

Select your home loan provider – There are quite a few lenders out there, be it banks or other financial institutions. Do your homework and select a lender that closely matches your thoughts and philosophies. This is because you will be associated with the lender for a reasonable amount of time (given that home loan tenures are rather lengthy) and you want to work with a lender that offers you comfort and impeccable customer service.

Avoid overspending – Know what you can comfortably afford, and stick to it. While it may seem a dream come true to have that 5 bedroom apartment you always wanted, remember that it comes at a cost – not only do you have to pay your EMI each month, but you likely have other commitments that need to be met as well. Hence, keep it real and buy a house that you can comfortably afford at the time.

Determine your loan eligibility – Prior to applying for a loan, run a quick check to roughly determine the loan amount you would be offered basis your current financial standing. This can easily be done using a number of tools such as a home loan calculator that are available online.

Know the interest rate – Given the sheer number of years you are likely to spend repaying this loan, compare home loans and see how much the property is going to cost you.

Know the paperwork – You should understand in depth the formalities to be followed, both at this stage and throughout the life cycle of the loan and home buying process. This will include valuation and verification checks carried out by the loan provider. Check that all legal documentation is in place. This includes the title and search report, development agreement, Power of Attorney (if applicable), commencement certificate, approved sanction plan from the relevant authority, occupation certificate, NOC etc.

Identify properties – As per your requirement, select properties that you believe you would be interested in. Shortlist/ narrow down prospective properties and focus on those. Meet with the builder (in case of under construction/ new construction) or the present home owner (in case of resale property) to view the property. If selected, make an offer and negotiate the sale amount. The seller (in case of a resale property) may have a particular price in mind. Once you have a fair idea of the value of the property, make an offer to the seller. Have the home appraised and inspected to ensure everything is in place structurally.

Check property documentation – You would need to thoroughly examine the documentation available with the seller, to ensure you are legally in the right. For example, in case of a resale property, the title deeds including the previous chain of documents, copy of the agreement to sell (if already executed between the buyer and seller) etc. are required for loan processing.

Consider the resale value – While they say that property always tends to appreciate, you ought to prepare yourself for any eventuality. Hence, when you buy a house also do factor in its resale value, and whether you are likely to be able to sell it easily, or would it take more time to liquidate.

Property registration – Once the sale has gone through, you would have to sign the sale deed and complete the related registration formalities (including payment towards stamp duty, etc.). Remember that property registration is a must under Section 17 of the Indian Registration Act, 1908. Determine the stamping requirements (as a percentage of the value of the property) and pay the registration charges for a sale deed. In case of a new property being purchased directly from the developer, the developer will convey the title in the name of the society. In case of resale property, then NOC from the society is required. When the sale deed is executed, before handing over complete payment to the seller, all title documents need to be collected from the buyer.

In conclusion

Let your home buying process be a pleasant experience, with no glitches to bog you down. It is therefore important to do all your groundwork thoroughly before proceeding with the purchase.

Remember that as with all loans, here too a good credit score is very important, and hence being credit healthy is one of the starting points to make buying smoother.

What are credit bureaus

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Mrs. Bakshi works for the IT sector at a senior position and draws a monthly income of INR 1,30,000. She is servicing three credit cards, one education loan for her daughter and a car loan. All of these have been procured from different banks. She now wants to know her performance on all of these loans and also wants to find out, how much is the outstanding on her loans and credit cards, to manage her finances properly.

What would she do to procure information on her loan accounts from all these banks? Run around to all the banks and ask for information?

Well, there is a single window / platform from where, this information about multiple loan accounts can be procured. It is known as ‘credit information bureau’. In India, the most well-known bureau is Credit Information Bureau (India) Ltd. Abbreviated as CIBIL. Let’s know more about these ‘credit bureaus’.

Credit Information Bureaus are the repository of credit and loan related information of borrowers. This is the information submitted by banks and lending institutions to the bureaus – about those customers who have – either single or multiple – loan accounts.

A customer who has multiple loan accounts at different banks, and wishes to draw information on all of those, may find it challenging & time consuming to do so. Whereas, if there is just one institute that provides all the information on all loan accounts of a particular customer, it is very convenient and also quick to seek such information.

This loan account information is known as “credit information report” and is prepared by credit bureaus based on the details submitted by the banks / NBFCs. A credit report can be of either individual customers, business enterprises or organizations & institutes. On the basis of information submitted by the banks, the credit bureaus compute credit score that marks the credit worthiness of the account holder.

How can one single bureau have all the information of Mrs. Bakshi’s loans and credit cards?

All the banks who lend money in the form of either loans or credit cards, have to compulsorily submit such information to the credit bureaus on a regular basis. Hence, any bureau will have all the information on a particular customer’s credit history whether it is a loan or a credit card; or whether they have taken loan from a single bank or more than one bank.

Is there only CIBIL or are there more credit bureaus in India?

There are four Bureaus operational in India, to whom all the banks report their loan information. Credit Information Bureau (India) Ltd. or CIBIL , Equifax Credit Information Services, Experian Credit Information Company and Crif High Mark Credit Information Services. A customer can seek their credit report from any of these bureaus. These credit bureaus charge a nominal fee to provide customers their credit information report and credit scores.

CIBIL charges INR 500.

Equifax charges INR 400.

Experian charges INR 400.

Highmark charges INR 300.

Many people wrongly believe that a bureau will provide them their credit information for free. There is no such a thing as free credit report or free credit score. One has to pay for such service.

How can CIBIL Score Affect your Savings?

In the financial world today, a person with the ability to borrow money and with a healthy credit score is considered to be accomplished and successful. Most people who are financially inclined know about the need for a healthy credit score. Though everyone reviews their credit reports, there are very few people who understand this game or know the ways of improve CIBIL score.

Difference between Credit Score and Credit Report

There is a vast difference between credit score and credit report. Credit report is a file which contains the details of a person and his credit history. It consists of all the information about the person along with summarized account of his financial statements. The credit score is the CIBIL rating of a person which along with the cibil report is used by the lenders to decide whether it is safe to give a loan to a person or not. In the financial world, a higher credit score is considered to be beneficial. When a person applies for a loan, the lender uses the credit rating of the person to decide the amount that can be loaned and the rate of interest. Credit score is directly proportional to the loan amount and inversely proportional to the interest rate.

Factors that determine Credit Score

The five factors that are crucial in determining the credit score of a person are discussed below:

  • History of Payment – The payment history of a person i.e. whether he pays his bills on time determines 35% of a person’s CIBIL rating.

  • Amount Owed – A person should always try to use less than 30% of the credit that is available on his cards to keep his credit score healthy.

  • Term of Credit History – A person should try to start building on his credits as early as possible as this contributes to 15% of the credit score.

  • New Credit – This determines 10% of the credit score and includes the new accounts that has been opened by the person or the credit enquiries that he might have made.

  • Types of Credits – This includes all the loans and credits that are being used by a person like mortgage, car loans or credit cards. This determines 10% of the credit score.

A credit score of above 700 is considered to be healthy and lenders actually compete to get business from such people. On the other hand, people who have a credit score of 620 or less are considered to be risky by the lenders.

How a good Credit Score helps in saving Money

A person who has a good CIBIL rating can actually save lots of money when he borrows money. Discussed below are a few instances where a high credit score can help a person in saving money:

  • Low Interest Rates: A person who has a higher credit score is eligible for lower interest rates on the loans that he borrows. This hold true for all the loans be it car loan, home loan or credit cards. This helps the person to save money that he would otherwise have paid as interest.

  • Insurance: The insurance companies check the CIBIL ratings of a person before deciding whether to cover his home and car or not. A higher credit score also ensures that the person gets an insurance coverage at a lower premium.

  • Lower or no Deposits: Any person with a lower credit score would also get benefits from various companies as they would lower the deposits that they charge or even waive them off. These companies would also provide better plans to the customers who have a better credit score.

Thus having a higher CIBIL rating is always beneficial as it gives a person an upper hand in the financial world and helps him save money.

How often should you check your credit score?

One may not need the credit or loans at all times, but it is prudent to keep track of your credit score regularly. If you find anything out of the ordinary, it would be wise to report it to the concerned lender immediately, and have it rectified.

As a consumer, you should be aware of your credit history, as any small error can play havoc with your score. Make sure that the information captured in your report is accurate and up-to-date, ideally checking at least once a year.

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When should you check your credit score?

There are four credit bureaus in India licensed to operate by the RBI. You can apply for a report to any (or all) of the bureaus, and check the scores across each.

A good strategy is to spread out your report requests throughout the year, instead of getting them from each bureau at the same time. That way, you would be able to keep track of your score year-round.

You may want to check your report additionally if you are planning to avail of a new line of credit – a loan or a credit card – as the score plays a critical role in the approval process. A good score can ensure you get a loan on the best possible interest rates and terms.

Alternately, it would suffice to request for a report from the bureau once a year. Checking your personal credit history as often as you like does not impact your score.

How to get a free credit score?

While the bureaus themselves do not offer a free credit report to consumers, you can log on to freescoreindia.com, for a free credit score from Equifax, one of the bureaus in the country today.

To summarise, while a free credit report is not available currently, spending a relatively modest sum to know that your financial information is correct is well worth it. Know your credit score and earn yourself some well-deserved peace of mind.

Can I Get Free Credit Scores in India?

Curious about your credit? Applying for a new loan to buy that dream house? The first thing to do would be to check your credit score, as it is an integral part of the credit report, a document that every lender scrutinises prior to approving a loan application.

CIBIL, Equifax, Experian and CRIF High Mark are the four credit bureaus or credit information companies licensed to operate by the RBI in India. Currently, none of these offer free individual credit reports. However, you can purchase your report on submission of basic documentation and payment of a nominal fee.

If you want to check your score for free, there is now an option to do so. In conjunction with Equifax (one of the said bureaus) Freescoreindia.com does offer this service. You can obtain your score by following a very simple process.

How to get your free credit score:

1. Log on to http://www.freescoreindia.com.

2. Click on ‘Check your free credit score’.

3. Fill in a simple online application form.

Provide information such as your name, email address, the city you are located in, and phone number.
The reason for requirement of the credit score has also to be mentioned.

4. Once done, click on the ‘Submit’ button.

5. On submission of all the required details and documents, your credit score will be updated to your online account (registered with Freescoreindia.com) within 72 hours.

6. You will receive notification via email and SMS regarding the same.

7. You can now login and check your score.

With this quick and easy service, getting a free credit score in India is indeed a reality!

It’s time to know more about your CIBIL Score

A credit report (of which the score is an integral part) is the first document that a lender refers to when scrutinising an application for a loan or credit card. It helps them gauge whether it would be risky or otherwise, extending credit to that particular customer. Having a good credit history is important, and therefore as an extension, it is equally important to know more about your score.

CIBIL is the only credit bureau in India – This is one of the first questions that are asked: are there any other credit bureaus (or credit information companies) apart from CIBIL? The answer is yes – there are four bureaus operational in the country today, namely CIBIL, Equifax, Experian and CRIF High Mark. Owing to the fact that CIBIL is the oldest bureau, it is interchangeably used as a term to define bureaus.

Of course, while each bureau has its own scoring pattern for credit reports (typically ranging between 300 and 900), the basic logic is the same. Each of them uses a set of information to derive the score through analytics.

Closing a bad account does not erase it – Let us say a consumer has defaulted on a loan in the past, or made repeated late payments. Even if subsequently the entire loan has been paid off, remember that the information does not get wiped off your report. While an old ‘good’ or ‘bad’ account may be closed following complete outstanding payment, detailed payment history stays as-is on the credit report.

It is therefore a good practice to make sure any loan outstanding is paid on time, to avoid any blemish on your report, and consequently translating into a low or a poor score.

A poor score means no loan – It is true that the higher your score, the better are your chances of a loan or credit card application getting approved. Further, it also helps to get debt at the most competitive terms and interest rates. However, do keep in mind that a credit score is not the only deciding factor – other information such as your income, other current outstanding etc. also play an important role.

Hence, while a low or poor score may get you a loan, you may wind up paying more by way of interest. It is also possible that while you for example applied for a home loan of Rs. 1.0 crore, a lender would approve a loan of a lower amount. It is therefore important to build up your score.

Repairing a low score is impossible – At the initial stages, the very idea of repairing a low score seems impossible. However, this is not so – with persistence and financial diligence it is indeed possible to not only better your score, but maintain it as such. If you do not want to travel this path alone, it may be a prudent decision to avail of the services of a credit health monitoring company, wherein you would be guided at length as to how to build your score from the ground up.

Do remember therefore that help is always at hand, and you can (successfully) attempt to improve your cibil score.

Checking your own score brings it down – In order to track your credit history, you would need to obtain a copy of your credit report. It is a good practice to check your report annually or additionally if you’re applying for a fresh line of credit. It is commonly believed that checking your score can bring it down; however rest assured it is not so. This practice in fact helps you monitor your score and stay financially healthy.

Purchasing a credit report is expensive – None of the bureaus currently offer free scores to a consumer; they are available for purchase on payment of a small fee and on providing basic documentation.

Alternately, Freescoreindia.com offers a free score from Equifax, one of the bureaus. You can avail of this service by logging on to the website and following a simple hassle-free process.

Social media and credit scores – With the advent of social media, there is a new concept by which your presence on social media networks such as Facebook and Twitter can help assess your credit score. As per a recent update, companies are exploring new ways to gauge the creditworthiness of consumers by understanding their profiles and behaviour on social media.

In places where structured credit scores are not available, this emerging platform may just be a viable alternative for lenders to explore.

The bottom line is, you need stay credit healthy at all times, and knowing more about your score is the first step in the right direction.