Did You Know?
We serve loans, the best way you can borrow
Your credit score speaks a lot about your creditworthiness as a candidate for a loan or new credit card application. So, reading and understanding your CIBIL report is quite significant. However, a beginner who has the slightest knowledge about assessing this financial report would not understand the procedure at the beginning.
That's why this post brings some easy steps that you can perform to gather the details mentioned in your credit report. Now, what exactly is a credit report, and how does understanding it matter to you? Let's begin from scratch.
Your credit score matters because it impacts your financial future. It's a three-digit number that directly impacts any loan application. Whenever you apply for a loan, your lender decides on the approval based on this score.
Suppose you apply for a new credit card. Your CIBIL report impacts the amount you can get based on your requirements. With a higher score, you can get a lower interest rate from the lender. Overall, it is used to determine the credit limit. If the score shows evidence of financial issues, the lender might consider lowering the loan limit.
Before you understand a credit report, learn how good a credit score matters. Most lenders consider 750 or above as a good credit score. The following points demonstrate the score bands based on their categories and meaning:
It signifies no history. That means the person has never taken a credit card or loan. So, they don't have a credit history. It is advisable to build the score to improve the financial future ahead.
This score demonstrates that the credit history has been damaged. Nonetheless, you can build a better score with good financial habits.
It's a low credit history where the individual has shown good credit habits after being damaged. It is advisable to take steps to improve it for a better future.
It's a fair credit score that demonstrates one's eligibility for improving the score.
It's a good credit score that indicates one's good credit behaviour. NBFCs and banks would happily accept loan applications with a score between 701 and 749.
It's an excellent credit score. Having a score above 750 indicates your eligibility for the best offers.
Understand credit report because it contains the below-offered details:
Your name and any other name you might have used in the past in connection with the credit account. It may also include nicknames in addition to the following details:
The following are the key details:
The following are the inquiry reports:
Your credit report consists of details about the current and previous loans that you have opted for. It may be a personal loan, home loan, car loan, or other types of loans. In short, the CIR offers details related to overdraft facilities and credit cards. If you want to read and understand your credit report, you can follow these steps:
Your CIBIL score is your current credit score. It is determined based on the credit behaviour as seen in enquiries and account sections of the report. In general, the credit score ranges from 300 to 900. As you already know, a score above 750 is excellent.
The next section is the personal details, where you can check certain information like:
While understanding your credit report, you should check out the contact details. Now, this particular section includes your phone number as well as your address. You may add up to four different addresses in the section.
Your account detail is a crucial section that includes necessary information on the credit type. So, you can get information on ownership details, loan amount, your last payment's date, current balance, account numbers, month-by-month record, and more. You get the payments for the last three years alongside the lender's name.
Enquiry detail is a crucial consideration. Each time you enquire about the credit card or loan, the financial institute bank will access your CIR. You can get the information in the CIR under the head of 'Enquiries.'
Lastly, you can get employment information based on your employment monthly or annually. This information gets reported by the associated members—financial agencies or banks.
While reading and understanding your credit report, you should keep a few things in mind. Your CIBIL score is dependent on the following parameters:
Remember that timely payments may improve your credit score. The score is significantly impacted when there are defaults on EMIs or late payments. The repayment history plays a big part in calculating the CIBIL score.
Next are the hard inquiries. Each time you apply for a loan or credit card, your lender is going to evaluate your CIB report. They assess your score via hard inquiries. Multiple hard inquiries might create a negative impact on your credit score. But when you download and check the report, it is called a soft inquiry. This report does not have a drastic impact on the credit score.
The age or duration of the credit history may impact the score. It might be considered bad credit behaviour when you have already used loans for a long time. This has an impact on your CIBIL score.
Suppose you have previously applied for various types of loans, like car, personal, home loans, and more. You have paid the debts responsibly and on time. This act shows your ability to handle various credits. So, if a candidate applies for a loan after building a decent credit mix over time, lenders take an interest in such credit profiles.
However, if you have taken various unsecured loans before, it shows you are dependent on credit. But if you can pay your debt by the due date, it won't damage your reputation.
Nonetheless, credit mix has a lower impact on your report, and it won't likely make a lender reject the application.
There are mainly five types of mistakes that you may see in the report, even when you are not at fault:
In the above-mentioned cases where you are not at fault, you can file a dispute with CIBIL. This may take 30 days, based on the time taken to respond.
Your credit report is a critical financial document that can greatly determine whether you will get credit, secure housing, or find employment. By comprehending how to read and interpret your credit report, you can ensure that its data is correct. You should frequently check your credit report and resolve any misleading or inaccurate information to achieve your financial goals.
Note that creditworthiness is an ongoing journey that requires consistent effort and practice of good credit management. When you take a proactive approach and understand your credit report, it becomes easier for you to move toward financial independence.
Download our personal loan app to apply for a personal loan. Get up to 2Lakhs* as a personal loan. Download Now!
Sign into avail a personal loan up to ₹ 2,50,000
Unifinz Capital India Limited is a Non Banking Finance Company (NBFC) registered with the Reserve Bank of India (RBI). lendingplate is the brand name under which the company conducts its lending operations and specialises in meeting customer’s instant financial needs.
