- HOW IT WORKS?
- Credit Score & Report
- Credit Bureaus
Credit Score: Overview
Credit score helps in knowing one’s financial well-being and it reflects the creditworthiness of a person that is coded with a three digit number. It is one of the factors that help in determining the approval of credit card or loan application. Credit score mainly is one of the main deciding factors between getting credit and denied credit. An ideal credit report includes person’s credit history with a minute in detail information related to financial aspects.
In India, the Credit score can be known through any one of the credit bureaus and at present, there are four types of credit bureaus like Experian, CIBIL, CRIF High Mark and Equifax. In short and precise credit score helps to discover and unlock your potential related to your Creditworthiness.
What Can You Do with Your Score?
Lenders use credit score to decide how likely will be an individual will repay on time if they give credit card or loan. Based on your credit history, personal credit score is built and a decent credit score is vital for a good financial health. There are some important elements that may impact on your credit scores which include a number of late payments, Total Debt, Types of accounts and Age of accounts.
You can understand factors that impact Credit Score to become more creditworthy. Whether to grant credit or not, lenders look each applicant’s credit scores that helps them to assess risk in a better way. Furthermore, Credit scores are objective, consistent and reflect likelihood whether the concerned person can repay back or not depending on the past credit history and also the current credit status.
How Often Do Credit Scores Change?
Your credit score normally gets updated every month. Lenders keep sending information to the credit bureaus that will help them to calculate your credit score. Your score keeps changing as it depends on your timely payments and also Credit Score gets updated when you inquire for loans. For every month banks and other financial institutions send borrowers information to the credit bureaus. In short it’s normally for 30 days.
Example Timeline of Credit Score Changes:
When the enquiries on the loans are made and depending on your regular and irregular payments, Credit Score Changes.
How Does Creditseva Work?
- Just by signing up with Creditseva tool and uploading your latest credit CIBIL report, Creditseva helps with graphical representation and detailed analytics as its smart tool analyses and it makes understanding of the report very easy.
- Now Creditseva helps you rectify errors, settle old accounts, set reminders for financial transactions, protect your identity from fraud. Furthermore, by making all payments on time and once you have attained the desired score; you can discover and avail new credit cards and loans from various banks and financial institutions. With Creditseva it’s easy to become credit Healthy.
What is a Credit Score?
A credit score includes a three digit numeric summary of history related to your credit and it is prepared based on the information in your Credit information report. Your Credit score plays an important role in credit or loan application and its processes related to its approval. To get a Free Experian\credit Score Just sign up with Creditseva portal enter few details.
Who Creates Credit Scores?
Credit Bureau’s such as Experian, CIBIL, Equifax and CRIF Highmark creates Credit Score and this score is a numerical expression which is based on the individual’s file and all the details of their credit that have acquired and paid timely throughout from starting time till date.
What is a Good Credit Score?
The Credit Score ranges from 300 to 900 and any score above 750 is a good credit score and there are more chances of getting approval for your credit application.
Let us understand aspects that impact positively affect your credit score includes:
- Regular payment of EMI and credit card bills
- Rather than paying minimum due of your credit card bill, paying bills in full
- Effective management of approved credit limit.
Why is my Credit Score Important?
Based on the individual’s credit history, Credit Score is determined. All financial aspects will be recorded in the credit history of the individual. Depending on credit card/ loan payments, the credit history is made and Credit Score is derived from such Credit History.
Undoubtedly your Credit Score is important and deciding factor for many reasons that includes –
- It helps lenders in deciding whether to provide Loans at the low rate of interest and loan amount at higher limits or not.
- To take decision for providing any credit opportunity to the individual based on Credit Score in the future.
- Any credit score above 750 is considered as good credit score and anything close to 900 is the best credit Score and there are more chances of getting credit. On Contrary, any bad credit score will result in lowering the chances of getting credit.
Aspects that impact negatively affect your credit card score:
- Loan repayments those are irregular.
- Defaulting credit card bills.
- Cheque dishonors/bounces.
- Being a guarantor and defaulting.
Why Do I Have More Than One Score?
You can have many credit scores in India, as there are four types of Credit Bureaus like Experian, CIBIL, Equifax and CRIF Highmark. Credit Score may differ from each Credit Bureau as by using information from your credit reports, the credit scores are calculated. Each Credit Bureau has different information related to you as some lenders don’t report to all four Credit Bureaus. It would be better if you try only one or two Credit Bureaus for credit Score.
Does Checking My Credit (Or Scores) Hurt My Credit?
To know whether checking your credit scores hurt your credits or not we have to understand that there two types of checking known as Hard Inquiries and Soft Inquiries.
Let Us Understand What is a Hard Inquiry?
Hard inquiries happens when financial institutions such as credit card issuer or any loan lender conducts checks on your credit score when or before making a decision related to lending. This type of inquiries happens when you apply for mortgage, credit card or for a loan and you authorize them to check your credit score. This type of checking your credit scores may hurt your credit score.
How Hard Inquiries Affect Your Credit Score?
- Inquiries related to your credit score can less by around 5 points.
- Many credit inquiries may create doubt among the creditors that you are in financial crisis.
- It can also lead to providing alert you a possible identity theft if you have been making those inquiries.
- It will remain your credit reports when all the inquiries that you made. It is always better if you check your Credit score before applying for a bank loan.
What About Soft Inquiry?
A soft inquiry occurs when part of a background check when a company or person checks your credit score. Some of the examples include when you get some pre-approved credit card offers and when background checks are made by the employer. Soft inquiries may occur without your permissions unlike hard inquiries. Soft Inquiries will not hurt your Credit.
Understanding Your Credit Score:
Lenders use Credit Score as a tool to analyze and understand the information that will help them in making lending decisions. Credit score depends on your payment history, the percentage of credit limit used, type and age of Credit Card or Total debt/balances and on latest credit enquiries.
Paying on time, planning effectively and right usage of your credit options will enable you to lead a well-planned and financial successful life. A credit score helps you to focus and work on your credit repairs and understanding what the factors that have an impact on your credit score.
How Many Scores are there?
Presently there are types of Credit Bureau’s that provide credit scores and that include Experian, CIBIL, CRIF Highmark and Equifax.
How Do I Get My Free Score?
You can get your free Credit Score with Creditseva, all you have to do is just sign up with the Creditseva and get free Credit Score Instantly. Wait no further, just sign up with Creditseva and also explore the possibilities of improving your credit score.
Some of the factors that affect your Credit Score include:
- Credit mix of unsecured and secured loans
- Credit card and recent loans
- Debt duration
- In loan applications being a guarantor and if the applicant fails to repay.
- Without any due certificate settling an outstanding amount related to loan or credit card.
Credit Score Range:
The Credit Score range helps the lenders to make lending decisions. Each Credit Bureau has their unique Credit Score range.
- For example, CIBIL Credit Score ranges from 300 to 900
- Experian credit score Ranges from 300 to 900
- Equifax Credit Score Ranges from 300 to 900
What Can Hurt Your Credit?
There are many factors that may hurt your Credit.
Though late payments and defaulting decreases your credit score but there are many factors that you might be not aware and that include.
- Defaulting as a loan guarantor
- In a short time making too many loan enquiries
- When the lender accepts the payment from the borrower lesser than the actual amount, though it is called as the settlement on your credit cards or on loan amount but it reflects as written off as bad debt in your credit score and it eventually decreases Credit Score.
- Your credit utilization used to maximum though marginally high and also exceeding the credit limit also affect your credit score.
- If you got more unsecured loans than secured loans it will also hurt your Credit Score.
What Can Help Your Credit?
Your payment pattern decides your credit score health and from starting to latest information till date related to credit is taken into consideration.
Some of the things that will help your Credit Includes –
- Avoid closing unused credit accounts, as having a good history of it helps.
- Always set up payment reminders
- Apply for any credit products only when you need.
- Avoid applying for loans or credit cards immediately in the case they are rejected. It would be better if you know your credit score and then apply.
- For accuracy, review your credit Score.
Difference between a Credit Report and a Credit Score:
Credit Score and Credit Report are interrelated but they are not same.
Credit Report: An ideal Credit Report includes a detailed credit history. Credit Bureaus are used by the lending financial institutions and Banks. Detailed account of your credit history is present in your Credit Report and it has 5 sections namely
- Personal Data
- Credit Score
- Accounts Information
- Enquiry Information
- Employment Information
Credit Score: Based on the information in your credit report, credit Score includes a three digit number. It shows how much of your credit balance you are using. It also reflects your recent payments and if there are any credits applications or any negative actions.
1. What is Credit?
Lenders use the numeric expression to determine the risk in money lending to you. An ideal credit score is the reflection of trustworthiness of your financial health and it is a lending tool that has a non-biased response that is fairer and faster.
2. Credit score is made up of following factors.
- Utilization of your credit
- Amount of credit that you owe
- Credit mix-You have a good mix of Secured loans or Unsecured loans
- Your payment history
- Credit establishment time
3. What is Bad, Good, & Excellent Credit?
- The popular Credit Score in India is CIBIL and its scoring ranges starts from 300 as the poorest score and goes up to 900 as the highest range and as an excellent score.
- 350-550 reflects as a bad score
- 550-650 reflects as an acceptable score and your credit is likely to be approved.
- 650-750 reflects as Good one
- 750-900 reflects Excellent
4. How often does credit score changes?
Your credit score changes as any new information are added to your credit report.
5. Do late payments affect your credit score?
Yes, paying late affects your credit score as it reflects the chances of any future nonpayment and it remains in your credit report for some years of time.
6. Do inquiries affect your credit score?
When your credit report is pulled by any credit report agency that inquiry is added to your report and this affect your credit score. This type of inquiries happens when you apply for any loans or credit cards. When you make a credit inquiry for yourself or when an employer checks your credit reports it will not affect your credit score.
7. Credit Score and its impact on getting credit?
It is simple, if you have a good credit score more the possibility of getting credit cards or loans with lower rate of interest and on contrary if your credit score is not good you will have less possibility of getting loans.
8. Who and what factors decide to get my loan?
Lenders and credit card companies decide to provide you the loan. Credit score is used by most businesses that issue loans, credit cards which will enable them to take a swift decision. Added to this, many factors help creditors in deciding the loan for the applicant like the size of the loan and the income of the applicant. In short Credit Score is the best indicator to know one’s creditworthiness.
9. Do any preapproved offers have impact on your credit score?
No. Credit applications initiated by applicants or consumers will affect your score.
10. Why I am not able to get my credit score/credit report
For getting credit score you should have past credit information. If you have not taken any loan or any credit card in the past, nor have any recent credit history, you may not have a credit score.
How is credit score calculated?
24 July 2017: Credit score is a numeric value which shows a person’s creditworthiness. It is calculated keeping various factors in mind by the credit monitoring agencies like CIBIL, Equifax and Experian.
Payment history of a person amounts to 35% of the score, outstanding debt amounts to 30% of the scores, length of the credit history makes up for 15% of the score, if you apply for a new credit card or loan then its weightage is 10% and lastly, demographics like age, location of your residence and number of ID proofs that an individual owns comprises nearly 10% of the credit scores.
Tips to manage multiple loans with 750+ score
12 July 2017: Having multiple loans even with a creditworthy score of 750+ can also affect adversely if not managed well. Certain wise steps taken at the right time will not only make one’s pocket happy but can also keep up the credit scores in 750+ limit.
In case of multiple loan requirements at a single point of time, it is wise to take one consolidated one instead of taking different loans for different needs. Also, one should keep the payment dates of the loan closer to the salary date and should not keep dues on credit cards while the loan payment is going on. One should not take more credit cards and loans till the existing one is not atleast half paid off.
Credit Scores crucial to get home loan
04 July 2017: Credit scores play a vital role in getting a home loan. According to recent news in Hindustan Times, unhealthy credit scores can cause rejection of loan application.
According to vice-president of CIBIL, Hrushikesh Mehta, “Past performance on debt obligations contributes about 30% weightage to the score; type and duration of loans taken in the past contribute 25%, total amount of credit exposure accounts for another 25% and other factors like credit utilisation and recent credit behaviour constitute the remaining 20% of your score”.
He recommended that one should always check the CIBIL scores before applying for any time of the loan. If the credit history is bad due to any reason then the individual should prefer taking secured loans like a home loan and auto loan than taking unsecured loans like a personal loan.
Your Credit Score will decide your loan’s Interest Rate: Here’s how you can check it
16 June 2017: The government of our country has consistently been explaining the importance of the cash-less economy, and many of us have now started opting for the digital mode of payment. With the slash of interest rates taking loans has become a preferable option. Let us understand how are credit cards and loans correlated???
It is the credit score that determines the creditworthiness of a person. It is also the determining factor for loan approval and credit card application. Your credit score can be affected by many factors like your borrowing patterns, payment pattern, the number of credit cards you hold, the way you utilize your credit and so on. It is crucial to maintaining a healthy credit habit as it is the credit card score that will determine the interest rate of the loan. Many portals offer credit card reports for free. You just need to enter your name, mobile number and other details and the credit report are two minutes away. If you wish to see a slightly advanced report, it is available only by paying a small fee.
The Reasons for Filing Fewer Reports against defaulters in Financial Year- 2017
02 June 2017: CIBIL or the Credit Information Bureau is India’s first Credit Information company and maintains all records of the credit-related activity, be it loans or credit cards. These files are submitted by banks and financial institutions to CIBIL. Since time immemorial the center and Reserve Bank of India have been pushing banks to take up the lawful route to resolve bad loan assets. Surprisingly the lenders have filed fewer number of legal cases this financial year when compared to the past two fiscal years.
CIBIL reports that this could be because borrowers are willing to settle their cases without following the legal route or because their cases are still under the resolution bracket and do not form the part of this report. Banks also have been talking to borrowers for one-time settlement and sought the help of RBI in the past.
Credit Score & Report
- Free Credit Score
- Free Credit Report
- Credit Monitoring
- Identity Theft Protection
- Credit Score Range
- Fix My Credit Score
- Improve Credit Score
- Credit Score Analysis
- Credit Score Advice
- Credit Score Vs Credit Report
- Know More about Credit Score & Credit Report
- How to Dispute Mistakes on Credit Report
- What is a Credit Information Report
- Can I Get a Wedding Loan with Bad Credit in India?
- How to Manage Debts before Moving Abroad?
- Instant Cash Loans with Bad Credit Score in India
- Credit Rating
- credit repair
- Why Do You Need to Check Your Credit Score Regularly
- Can I Get Car Loan with 650 Bad Credit Score in India
- Can I Get a Loan with a 700 Credit Score?