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Credit Report: How to Read and Understand Your Report

Today, many credit evaluation/analysis companies are working on providing free credit reports to individuals.  All one needs to do is submit details for in-depth analysis and send out a free consumer credit report. Companies like Policybazaar, Bankbazar & PaisaBazaar are providing free services to encourage easy credit reporting of individuals.  The process is simple and quick with registration on the main site and the scores being sent within 1 day or two.

Some financial institutions send you a detailed credit report whereas others send you just the relevant details like CreditMantri.  The target is to simplify the process of accessing the credit score and history at the blink of an eye. Also spreading awareness amongst the unaware is another motto for the financial institutions. It’s quite unfair on the customers to not timely check their credit score. Every time you check your credit status; it comes out differently. This is why it’s highly critical to know the history of your past and your transactions. Between 40-50% of loans are rejected because of eroded past credit history.

It is recommended nowadays to get yourself checked whenever a free opportunity knocks your door. Now that you have the free credit report in your hands, its best just not get a direction but also work towards rebuilding. This can only be made possible if you’re reading the report properly. Acquire sharper skills to read flawlessly and implement changes to your financial spending & pattern.

Here’s a guide on how you need to read and report your creditworthiness and create a positive financial equation:

The trend is that individuals with a credit score above 750 can have a loan easily. This does not disqualify individuals scoring below 750.  Each bank has its own set of do’s and dont’s, which means that each score can be worked upon. Individuals with a lower score are not directly neglected.

READ MORE: YOUR PERSONAL LOAN IS TIED TO YOUR CREDIT SCORE 

A typical bank may neglect your credit score for providing loans, however, risk verse NBFCs & financial institutions can still grant a chance in exchange for a higher rate of interest. This is against a simple logic, better the score, easier to procure a personal loan. If you do not have any credit history, then nothing will appear at all.

Earlier, no status reached the credit bureaus for an individual with a history less than 6 months however, now the trend is changing. Infact, CIBIL has launched a brand new risk criteria to evaluate people with no or short credit history. The index will range between 1-5, The index score range is from 1-5, with 5 being the lowest and 1 being the highest.

It is important to have on time verification of the information and avoid crimes. Just to let you know, your credit score purely depends on your credit history and on-time payments. Having said that, believe in making your payments on time and not defaulting on EMIs to the farthest extent possible. All your credit activities show up in your credit report and which is why a numerical value is attached to the report.

READ MORE: WAYS TO REBUILD YOUR CREDIT SCORE 

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