3 Ways Parents Could Accidentally Harm Their Child’s Credit

Credit health is as important as your mental or physical health. However many a times we realize the significance of credit health only when it is hurt. A low credit score hurts your credit worth and makes you ineligible to advance the loans.

Let’s find out some of the common mistakes which hurt the score in the beginning of credit building cycle of an individual. Herein we would focus on 3 ways parents accidentally harm their children’s credit report.

  1. Multiple Student Loans
    The escalating costs of school and college fee is one of the major reasons why student loans are as much a fad as a necessity for young aspirants. The parents who fail to incur adequate research on the matter and avail a high cost loan for the purpose, certainly build a huge financial burden right in the beginning of their child’s credit life cycle.

    Many people mindlessly raise multiple loans for students owing to availability of credit facility at lower rate. With enormous amount of debt it would be a huge responsibility for a student to repay a loan after completing their education. As a parent, it is your duty to calculate total fee amount and try to look for the least expensive way to finance your child’s education.

    You also need to build the healthy habit of saving funds in your child. As a parent, it boils down on you to inculcate good financial habits in your child. Raising too much of loan for their education would not be a smart decision if it results in low CIBIL score.

  2. Share your credit cards
    Excessive spending is another key reason for impending balance on credit cards. Before handing over a credit card to a young mind, it is important to help them understand the importance of not having huge balance at the end of every month.

    Being a parent you can also add the kid as your credit card account holder. It will sometimes help them to improve their CIBIL score. But maintaining good credit behaviour would be a must. As an adult you need to ensure that regular payments are processed on time and there is no balance after the due date. Remember your child is most likely to follow your footsteps. If you are not serious about repaying your bills on time, the child is also not likely to pay attention to deadlines. You would seriously challenge your child’s future with bad credit habits.

  3. Credit education
    If you fail to teach right knowledge about finances and credit to your child it is your failure as a parent. You need to make the young mind understand the important aspects related to money management and ways to improve CIBIL score. The first credit lesson starts from home. You need to make the child understand how credit affects their life. You need to make them understand the importance of credit for their education, job to buying a home or car.

You need to teach them how important it is to monitor their credit score multiple times in a year. It is important to let them know how information in their credit report will impact their credit score.

Educate them about the available resources to obtain a free annual report. You can choose to review it along with them so that they learn the intricacies of maintaining a good score. You need to help your child develop a mindset that it is easier to maintain credit health rather than fixing bad history later on.

Last but not the least, do not forget to talk about identity theft threats. For online it is one of the fastest-growing crimes. They should know that sensitive information related to account should not be shared with anyone outside.

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Is a ‘Perfect’ Credit Score Even Possible? Or It’s a Myth?

The credit score is globally accepted as a signpost to a person’s credit worth. Banks and financial institutions consider this three digit number as a hallmark of your repayment capability. They gauge the risk factor associated with each loan application considering the credit score of the applicant.

In India CIBIL score is primarily considered as the benchmark of a person’s credit score. Credit Information Bureau of India and TransUnion CIBIL Limited are some of the other names of CIBIL which is the premium credit agency of India. It is country’s first credit bureau which modeled a systematic credit scoring system for banks and financial systems.

The CIBIL score is calculated between 300 to 900 points, wherein 900 is the perfect score while 300 is the lowest score. The more closer an individual or a business is to 900 CIBIL score, the better is their credit worth in the eyes of a lender. According to CIBIL 80 % of people with 750 or above points are granted loans by banks.

It is worthwhile to consider here if a good score a guarantee to loan approval? And for that matter, is it practical to get a perfect credit score such as 900 CIBIL points? Is it even possible to attain the perfection or it is just a myth?

It is not possible to state an absolute calculation on what causes low CIBIL score and why. So, let’s find out what compounds a CIBIL score to reach to point of understanding for this query.

Credit score calculations factor in too many aspects which are not absolute in nature and may vary from person to person. Every individual and business vary in terms of their credit worth and so does the impact of their financial moves.

However we can inscribe 5 common factors that affect credit score calculation globally:

  1. Repayments
    To maintain a good credit score, timely repayment of loans and credit bills is a must criterion. Indeed it is one of the key factors that define the stature of your score. According to CIBIL reports discipline in credit repayment can boost your score by 30 to 35 percent. Thus diligent repayment could be your first step towards the perfect CIBIL score.
  2. Credit utilization ratio
    As important it is to repay on time as is to keep a check on your credit accounts. You should always ensure that you do not overuse the credit limit offered to you. Those who exhaust their limit every month are less likely to have a good score. Lenders assume that you are short of cash and your financial situation might be not be as sound for a perfect score. So, using more than your credit limit has a negative impact on your credit report. Indeed it is recommended to limit your credit use far below 30% of total approved limit.
  3. Query
    Always ensure that you do not make multiple queries in a small period of time. Every time you make a query for loan or a credit card, it is marked on your credit report. Frequent queries
    on your report signify credit hungry nature and thus make you financially less strong.

 

  1. Credit mix
    Every time you borrow or use a credit product, the lender undertakes a risk. They charge interest rate to cover up this risk. When you borrow against a property or some other collateral the risk is substantially reduced and thus you are offered a better rate of interest. With this said, I hope it is clear why you should maintain a right credit mix of secured and unsecured loans. Too many unsecured loans restrict your score.
  2. Length of credit

The length of credit history also affects the score. The older is the good history the better effect it will have on your credit report. Thus those who have older history are rated better than new borrowers. This is also why when you close an old credit card with good history, it affects your score negatively.

 

Knowing these factors you can ensure a good score during all the seasons of your life. If however you target the perfection, you need to frequently check your credit report and monitor every activity that hurts your score.

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.

Importance of good credit score for Home loan

Buying a dream home is a dream every man cherishes till it becomes a reality. However the escalating cost of property calls for huge financial planning and investment. Most of us indeed opt for a fund lender in order to materialize this dream. Herein your credit score plays a pivotal role.

Your credit score is the score of your financial worth. In order to seek a hassle free home loan in India you need to have a good credit score by Credit Information Bureau of India Limited (CIBIL). Besides, other factors such as your age, salary and job also play a key role in the backfield. You would be required to submit documents for each of these factors to become authorized for raising the loan.

Role of CIBIL score in home loan approval:
Your CIBIL rating helps lender to evaluate your credit worthiness and repayment ability before approving a Home Loan. That’s why a good CIBIL score is a must to get a loan approved.

The CIBIL score is the summation of the credit history of a person. Factors such as your earlier loan payment history, outstanding loan amounts, credit enquired, payment history of credit card bills and more build your credit history. When you apply for a loan the first thing that the bank will check is your cibil rating.

The lender always want to cover the risk they are taking by lending you loan. So by checking your CIBIL score they assess your repayment track record. The low score reflects bad financial decisions including excess use of credit limit, non-repayment or late payment of loans and more. Thus with low score, there is a high possibility of rejection of your loan application. Similarly with a good score your loan application becomes attractive and lender shows confidence in your application by offering loan.

What does a good CIBIL score actually signify? 

A good CIBIL score to be eligible for a home loan is 700 and above. The nearer you are towards 900 the higher is the chance of getting the approval. Furthermore, an upper credit score means that you can bargain for attractive offers like lower interest rates, higher loan amount, simpler documentation, discount in related fees and longer repayment periods. The lender might approve up to 80% of the total cost of the property.

If you have a low CIBIL Score are you still eligible for a home loan?

While it is not easy to get home loans for bad credit score, you can still take some steps to roll the dice in your favour. You can either use professional help or credit improvement counseling or take some steps to improve your score.

  1. The first step should be to pull out your free credit report from CIBIL.
  2. Next mark all the weak points that have hurt your CIBIL score. You can take small steps to boost your score. The better the score the better rate you can expect.
  3. Now you can list all small, high cost loans and try to repay them at the earliest. This will substantially improve your score.
  4. If your spouse has a good credit score then you can apply for the home loan jointly. This way you will have better chance of having your loan approved.
  5. If you have defaulted the payment of a loan or credit card bill then negotiate with the financial institution, clear the dues and get a no objection certificate from the financial institution. This will bring a good appreciation to your score.
  6. If you have a poor score then try to get the loan from the bank with which you have your savings account and FD’s.

 

Using these points you can raise your chances for loan approval. However getting loans with bad credit score has its own advantages and disadvantages. The biggest advantage is that it will make you take constructive steps to improve your CIBIL score. It will inspire you to close the earlier loan and repay the entire amount in a one go. The biggest disadvantage however, is that you will have to pay high interest rates and even the fees and charges that are associated with the loan approval will be higher for you. But as you would learn to protect your credit score, you would soon become credit ready for lifetime.

The Bad Credit Score Survival Advice

A red flag in the credit information report is like a fire in the jungle. You do not know how much damage it would make until it eases off. Surviving bad score is thus not easy. A lot of people might share the tricks of restoring credit score however the truth is, it is easier said than done.

Once ruined it would at least take six months to rebound the low CIBIL score. Many a times the damage stays on your report for years to come. All you can do is pacify the bad history with good history.

Let’s find out how you can cope with bad score and roll over the financial dice in your favor once again.

Seek professional advice on bad credit score survival.
After you come to know about your low score, the first step should be to seek a professional help. When you contact a Credit Improvement Agency, it would assess your credit report and guide accordingly the ways to improve the score.

If however you choose to do it yourself, go for free CIBIL check online and study your report. It will help you understand the gravity of the problem. After studying the report, if you find any errors eliminate them without a delay.

Make a budget and organize your finances
With bad score, your credit worthiness is hurt very badly. You need to take charge of financial conditional and analyze your expenses and incomes. Calculate your net income and know how much you actually have in hands to pay out the debts and installments. You should try to close the expensive cards and accounts first and try to save as much as possible.

Not to mention, you should try to add as much income avenues as possible and try to have some surplus every month. Your sole aim should be to become take your debt utilization ratio to 30% of the limit being granted to you.

Contact your creditors and make a repayment plan
When you have too many debts to manage, you should consider contacting your creditors in a hope to find an option to survive the bad account. Speaking with your lenders may help you find a middle path with lowered interest rate or a new repayment plan.

Raise additional loans to pay off loans / credit cards
After you limit the pressure of debts by closing expensive cards and refinancing of the loans, consider applying for new secured loan to survive the bad credit. You can use the amount to manage your finances and repay diligently all the installments. This would build a good history and gradually improve the score.

Use a co-signor or guarantor to avail low interest loan
When you have bad credit score with red flags in the credit report, it is unlikely that banks would offer you loans at low rate. With bad score you become a risky prospect for the bank and they want to lend only with a certain degree of security. Besides rejection of a loan application further ruins the score. Keeping both the facts in view, you should apply for loans with a co-signor or guarantor.

You can ask your friend, spouse or blood relative with high credit score to become a co applicant or guarantor for you. This would raise the chances of loan approval and that too at normal interest rate.

Use a high worth asset as collateral
With bad CIBIL score each unplanned financial activity would hurt your score further. Besides loan repayment and credit utilization ratio, the mix of loans and length of loans also affect your score. If you have home equity or other high value assets such as Gold, you can use these assets as collateral and raise a secured loan.

Consolidate your debt
When you have too many debts to pay and manage every month, you can consider consolidating them into a big umbrella loan that helps you close all accounts into one. You can consolidate loans as a long term personal loan using your home as collateral. The goal of consolidating loans is to make your monthly repayment affordable and save some surplus every month.

Rent a home/property
Last but not the least you can consider renting your home or part of your home to raise some extra funds and save some amount every month.

Using all these steps you can gradually improve your credit health.

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.

 

Guide for steps to be taken if wrong loans get reported in CIBIL report

A CIBIL Report is made after collating and collecting a lot of data. This data may pertain to loans, credit cards, payment details, individual’s personal details and employment details. Any credit rating agency be it CIBIL or some other agency just collects the data that is provided to them by various lenders and presents it in the prescribed format and uses the given data to compute the credit score. However sometimes due to error in data provided by some lender, manual fault etc there can be some errors in the CIBIL Report.  A credit check from time to time not only ensures that the person can assess his credit health but also helps one in spotting such errors.

Types of Errors in a CIBIL Report:

As we said there is a lot of information and data provided in a credit report thus there can be various types of errors. While some errors may impact CIBIL score calculation others may not. However it is important to mention that regardless of the impact of the error on the scoring it is imperative that they are rectified at the earliest.

The errors can pertain to wrong reporting of the name, address, date of birth, PAN, Aadhar and other such details. One’s employment details like name of the current or past organization of length of service etc may also be reported wrongly. These errors do not impact the credit score directly.

Then there are errors which can cause trouble as they impact the credit score calculation. These are reporting of a loan that does not belong to you, showing a payment default which did not happen, a larger than actual overdue amount, inaccurate account status (defaulted/settled), wrong loan closure details. These errors can cause your credit score to be low and require immediate attention and correction. Reporting of a loan that does not belong to you lowers your borrowing capacity and any default that may occur on that loan will be reflected in your credit report.  There can be multiple reasons for these errors like the problem may occur at the time of entry or some confusion about an address or PAN details etc.

How to Get the Wrong Loan Removed from the Report?

The first reaction of anyone on seeing a loan that does not belong to them on their CIR would be confusion and panic. However rest assured it is not such a serious issue and can be resolved. The key is to keep checking your report from time to time so that you are aware of the mistakes if any. Problems arise when a person checks their report just before they want to apply for a loan then there might be no time to get the mistake rectified. Worse still they may realize that there is a problem after a loan has been rejected due to a low cibil score. So here are the steps that need to be taken when you spot an error in the report:

  • The first step in obviously to get your CIR and go through the entire report thoroughly so that you know what it contains. Just looking at your CIBIL rating online will not help as one may not be aware of the contents of the report or about the loan listed in it.
  • The next step is to inform CIBIL about the error and register a complaint. This can be done online too. There is dispute resolution option on the CIBIL website, one can fill the complaint form, the 9 digit number from your CIBIL report is mandatory for filling this form.
  • The error may have happened at the level of the credit agency or the lender. Depending on where the error originated the next step would be taken. If the error is at the level of the agency then it can be rectified faster.
  • However if the loan has been erroneously reported by the bank then since CIBIL being just an aggregator will not be able to make any changes on their end and will get in touch with the concerned lender.
  • One can expect a resolution within 30 days of filing the complaint. If one is not satisfied with the resolution then the complainant can approach CIBIL again and if still the matter is not resolved then one can approach the banking ombudsman.

Do follow basic credit health rules and keep checking your credit report from time to time to stay credit healthy. If there is an error, don’t worry there is way to resolve it.

 

5 Ways to Build Your Credit Score from Scratch

It can be a terrifying experience to find out that your loan application was rejected due to the absence of a credit score. However, there is no reason to be alarmed as there are many people who don’t have a credit score for many reasons. If your credit history is blank, then you can build a good one in many simple ways.

The following are 5 good ways to build your credit score from scratch:

  1. Joint Account Holder

The easiest way to build a credit score to become a joint account holder with a person who already has a credit history. However, you must choose your partner carefully.

You would want someone who you trust, and who trusts you too.  This is because your credit history will be based on the kind of credit history they have as well. So, if they have a good CIBIL rating and a good history of timely payments, then your credit score will also increase. Similarly, if they tend to delay EMI payments, etc. then your will have low CIBIL score.

If you want a home loan on an urgent basis but don’t have a good credit score, or have no score at all, then becoming a joint holder is one of the best options for you. This is because the lenders generally don’t consider passing a loan “risky” then there is a joint account holder involved who has a promising credit history.

  1. Becoming Authorized User

It is not always possible to convince someone to become a joint-account holder with you. In that case, they might at least make you an authorized user.

While being an authorized user you don’t share any financial responsibility with the account holder and server only as a signer you can still get credit building advantages. The only problem with this method, however, that you may not see the results, at least for a long time. So, if you want to build credit score fast then becoming a joint account holder is a better option.

  1. Getting a Credit Card

Getting a credit card and using it wisely is another excellent and simple way to build your credit score. Since most banks love to push credit card usage anyway, it won’t be hard for you to get one for yourself. However, the real work begins when you get to spending. Here are a few things to keep in mind when you use your credit card:

  • Credit Utilization: No matter what the limit on your credit card is you must spend it wisely. Ideally, you shouldn’t spend more than 30% of the credit limit. Thus, if the credit limit is Rs. 1 lakh then you should cap your monthly expenses with the credit card to a maximum of Rs. 30,000.
  • Timely Payments: Believe it or not, timely payments are extremely important to build a healthy credit score. If a potential lender performs a credit check and finds a history of delayed payments, then it is easily possible that they will reject your loan application. Similarly, if they see a history of payments done on time then they will feel confidence in your creditworthiness and it will be easier for them to sanction a loan.
  1. Personal Loans

Personal loans are tricky to get especially when you don’t have a credit score. However, you still have a good chance to get a small personal loan. In fact, if you could manage a personal loan along with a credit card then you can get the desired results faster as a mix of different credit forms (loans and credit cards) can give an impetus to the credit score.

  1. Monitoring Your Credit Report

You can easily find your CIBIL rating online. Most of the credit bureaus of India allow the users to download their credit report for a nominal fee. If checking your credit report you find that there are some errors or discrepancies, then you can have them corrected and see an improvement in your score.

Credit building is a long-term process. Unless you already have a credit score it can be difficult to build one, and not to mention the time and effort it demands. That being said, if you can find someone who has some experience in this area then you can succeed in the endeavor easily and faster.

Are you really credit aware

In this day and age most people have become dependent on credit. Owning a home, car, funding a wedding etc. have become much easier thanks to the various credit facilities extended by financial institutions. However, despite the rising popularity of credit, many still do not know about the function of the credit bureau and have limited understanding about their credit reports. Being credit aware is important as it can help you with bad credit fix, enhance credit score etc. that in turn eases your financial journey. In this article, we will look at what one means by CIBIL report and credit score as well their importance.

 

To borrow money from financial institutions, your credit report and score plays a big role. The credit rating is assigned to you by the credit bureau. TransUnion CIBIL Limited is the country’s first Credit Information Company. Popularly known as CIBIL, the institution holds the records one’s payments in relation to loans and credit cards. Credit Information Report and the CIBIL TransUnion Score, the two CIBIL products, have brought drastic changes in the way credit is handled by financial institutions and customers.

 

A credit score, generally referred to as CIBIL score, is a three-digit number that reflects your creditworthiness. The number is determined based on the elements found in the credit report. Financial institutions look at your CIBIL score to estimate whether you will be able to repay back the loan amount on time. The credit bureau uses advanced analytics for calculating the score and then assigns the individual a number between 300 and 900. The closer the score is to 900 the better. It is important to enhance credit score, if your digits are below 750. The first and the foremost way to enhance credit score is by ensuring all payments are made on time. Multiple payment defaults can bring down your score. Lowering your credit utilization rate is another means to enhance credit score. Also, it helps to maintain a healthy credit mix; do not hold too many unsecured loans. Putting into practice different measures to enhance credit score is mandatory for all as it will help you avail credit easily and at low rates of interest.

 

If want to check your score, you would need to visit the official website of CIBIL and fill in the online score request form. You would then have to fill in the kind of subscription you require and your personal details such as email address, date of birth, gender and PAN number. After entering the required details, the site will direct you to the payment page. When the payment is done, you would have to submit authentication details, and once this step is successful, you will receive your score in a matter of some hours via email.

 

A credit report contains details about your credit history. Financial institution run a credit inquiry i.e. make a request to check your credit report before extending credit. The report is useful in identifying your true financial standing. Some of the information that can be found in your credit report include – defaults on loans (if any), number of inquiries made by banks and other financial institutions, types of credit used, payment history etc. Checking your CIBIL report at least two or three times is required as it helps you stay aware of your financial position. In case you spot any errors, you can raise a CIBIL dispute which in turn will ensure bad credit fix. Undertaking bad credit fix by getting errors in the report rectified is also a means to enhance credit score. Hence to make sure that no errors have crept in or your accounts are being misused, it is important to check your credit report at regular intervals. In case it occurs, raise a dispute with the bureau who then will undertake bad credit fix.

 

It is not just the banks that have an interest in your credit score and report. The other parties that can show interest in your credit history include employers (to making hiring decisions), landlords (to determine your ability to pay rent) and sometimes even by insurance companies (to decide on the premium). Now since multiple parties can look at your score, it becomes essential to undertake bad credit fix in case you have a weak score. If your credit utilization rate is high then one way to conduct bad credit fix is by getting a higher credit limit and spending less. If a particular line of credit is hurting your score then focus on getting rid of it by paying it off sooner. Striving to enhance credit score is necessary as it creates a positive image in the minds of the financial institutions. Remember, the closer the three-digit figure is to 900 the easier your financial journey will be.

 

 

 

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.