A credit score shows the credit worthiness of an individual. In simple terms it tells lenders if they can issue a loan to a person or not and at what rate can the loan be issued.
It is also important for every person to know his or her own credit worthiness as we never know when we will need a loan. Following are steps to be taken to track your Credit Information Bureau of India (CIBIL) score:
There may be errors in your credit score: The first step in achieving your goal is to get your personalized credit score. When you get your personalized credit score first check if your name, address, telephone and PAN numbers are accurate. Then verify your bank accounts mentioned in the score and also the credit cards and loans being serviced in your name. Report to CIBIL immediately in case of discrepancy. You can log on to CIBIL Website to register a dispute for errors on your credit report https://www.cibil.com/online/file-consumer-dispute.do
You might pay more for new credit: Indian banks are slowly moving towards risk-based lending. In simple terms if your credit score is higher you will pay lower interest rates and vice versa. So it is important to keep track of your credit score to avoid discrepancies, which may pull down your score. Even if there is no discrepancy in your score and your score is low, there is a way to work towards increasing it.
Unnecessary enquiries: Your credit score is your right. You can get it any number of times you want. But no lender can get it without your permission. In fact if there are many enquiries against your score, it could hurt the score dearly. So it is important to track your score to avoid people placing unnecessary queries. Unauthorized queries for credit score could be a case of identity theft. It could mean that somebody may be using your credentials to get a loan. So be very careful.
Be prepared for future: In the developed economies, prospective employers, landlords, insurance companies and telcos too monitor individual’s credit score before they take on a customer. This may soon become a reality in India too. So be ready for the future by financially disciplining yourself.
Set a credit score goal:If you are not in the prestigious “800 plus score” club, don’t panic. You can work your way up the ladder to reach there.
So take the first step towards living a financially healthy life. Track your CIBIL score for the financial well-being.
The author is Co-Founder & Director, CreditVidya
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