What is a good credit score and is it okay to check your credit score regularly? Which website or app is safe to check credit scores?
Regularly checking your credit report is essential for several reasons. A credit report provides a comprehensive overview of your credit history and serves as a crucial factor in determining your creditworthiness when applying for loans, credit cards, or other financial products. Here’s why it is important:
Identifying errors: Credit reports may contain errors or inaccuracies that can negatively impact your creditworthiness. By reviewing your report regularly, you can identify these errors and get these errors rectified promptly. This ensures that your creditworthiness is accurately represented to lenders and increases your chances of obtaining favourable terms and interest rates.
Monitoring for fraudulent activity: Regularly monitoring your credit report helps you to detect any signs of fraudulent activity, such as unauthorized accounts or suspicious loan-related inquiries. Timely identification helps in minimizing the potential damage by allowing you to take immediate action, such as reporting the fraud to the credit bureau and relevant authorities.
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Improving credit health: By reviewing your credit report, you can assess your credit health and identify areas that need improvement. This includes managing outstanding debts, ensuring timely payments, and reducing credit utilization. Monitoring your report allows you to track your progress in building a positive credit history over time, thereby help you to build a healthy credit score.
In India, credit scores typically range from 300 to 900, with higher scores indicating better creditworthiness. While different lenders may have their criteria for evaluating credit scores, generally, a higher credit score is considered good and improves your chances of loan approval and favourable interest rates. Here is how credit score is categorized: It is rated excellent if the score is 800 and above; very good. if it is between 750 and 799; good, if it is 700 – 749; and fair, if it is between 650 and 699. A score between 600 and 649 gets you a poor rating, while it is bad if the score is below 600.
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To check your credit score, the best source is the credit bureaus authorized by the Reserve Bank of India. Currently, there are four major credit bureaus that operate in India: TransUnion CIBIL, Experian, Equifax, and CRIF High Mark. These bureaus collect and maintain credit information, generate credit reports, and calculate credit scores.
Individuals can access their credit reports and scores directly from these bureaus’ websites or through their authorized partners. It is important to note that you are entitled to one free credit report per year from each credit bureau. Beyond that, credit reports may be available for a nominal fee.
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It is important to regularly check your credit report. A higher credit score can not only help you to get a loan approval, but also get good interest rates. Lower the interest rate, the lesser would be the loan burden in terms of EMIs (equated monthly installments). But remember, it is best to rely on the authorized credit bureaus to access your credit score.
