Have you ever wondered who provides you with your credit score or credit rating? The Reserve Bank of India (RBI) has given permission to a credit bureau to assess and record all of our financial information. Equifax, Experian, CIBIL, and HighMark are the credit bureaus authorized by the RBI in India. Each of these organizations provides you with reliable and up-to-date information on your credit scores. The CIBIL is India’s oldest and most reliable organization for checking your credit score. The CIBIL scores were determined to be the most reliable. Currently, however, all lenders are required to send financial information to all four credit bureaus. Let’s take a closer look at credit scores.
How do you define the credit score?
The credit score is a summary of your financial records, debt history, repayments, credibility, creditworthiness, and other factors. It is used by the organization to decide whether or not a person is worth repaying a loan. It’s a numerical representation with a range of 300 to 900 numbers. Your credit ratings will suffer if your score falls below a certain threshold. In the opinion of the lender, the closer you are to a score of 900, the better you are as a borrower.
As a result, this is how your credit score works. Maintaining a strong credit score is required if you want to receive a personal loan. Because a personal loan is an unsecured loan, lenders can only evaluate the applicant’s repayment potential using his credit score. Even when it comes to secured loans, credit scores are a major consideration for lenders.
What influences your credit scores?
The following are some of the things that can affect your credit ratings. Read on to learn how to avoid these issues.
- History of Payments
- Pattern of repayments
- Secured to unsecured loan ratio
- Debt duration
- Amount due in total
How can you find out what your credit score is?
You may check your credit scores at any of India’s credit bureaus, including CIBIL, Equifax, HighMark, and Experian. You can only check your free CIBIL scores once a year at either of these credit bureaus. If you want to check your scores more frequently than once a year, you will have to pay a fee to use the subscription service. To check your credit score, go to any of these four credit bureaus’ official websites and register and log in. After enrolling, you must fill out your personal information and request your credit score.
How do you keep your credit score from dropping?
To avoid lowering your credit ratings, you must be aware of certain facts. Here are some suggestions for keeping your credit score in good shape:
- Always make on-time payments on your invoices and EMIs.
- Don’t be overconfident in your credit ratings, and keep track of them on a frequent basis.
- Make sure you have a good mix of secured and unsecured loans.
- Close previous accounts if you want to build up a lengthier debt history.
- Do not take on too much debt in a short period of time.
Final Thoughts
Your credit score is thought to be a reliable indicator of your creditworthiness. Your CIBIL or Equifax score is influenced by the quantity and types of loans and best credit cards in India you have, your existing debt, and the length of your credit history. If you have a strong track record and a good credit score (whether it’s a CIBIL score, Equifax score, Experian score, or HighMark score), lenders will be more eager to lend to you. What matters is your trustworthiness, not whose bureau your credit score comes from. Keep it in mind and strive for a stress-free lending experience.
