5 Facts About Your Credit Report That You Must Know
You are aware that you need to have a good credit score to get a home loan from banks. And, you would like to see it for yourself that you have a good score before banks reject your application citing a poor credit score as a reason. In that case, here is all you need to know to access your credit-related information:
- Credit bureaus use data provided by financial institutions to analysis your credit behaviour, based on which a score is assigned to a customer. While a credit score between 300 and 600 is considered a risky proposition by banks, a score above 700 is considered no-risk zone. Depending on your credit score, a bank may or may not decide to lend you credit.
- From January 2017, the Reserve Bank of India (RBI) has made it mandatory for credit bureaus to offer one credit information report (CIR) for a financial year free to customers if they demand the same. This means you can get four CIRs for free every financial year. There are currently four credit bureaus operating in India — CRIF High Mark Credit Information Services, Equifax Credit Information Services, Experian Credit Information Co. of India and Transunion Cibil – and these are mandated to offer you one free report every year.
- A customer might find the task of availing of a CIR report tiresome and lengthy. On an average, it takes between two and seven days to get a report from credit bureaus. Despite the fact that all these bureaus are offering the services online, the process is often complicated. If such is the case, there is no need to get worked out; there are financial tech companies such as BankBazaar.com and PaisaBazaar.com that come to your rescue. By authenticating these fintechs to access your credit information (this would mean providing all your valuable details), you can avail of your CIR in a matter of minutes for free. However, experts are of the opinion that this might result in data breach as fintechs might use this information to market other products or sell it to a third party. Before you approach a fintech to help you with a CIR, make sure you are dealing with a trusted name.
Also read: These Are The Myths About CIBIL Report
- While the basic structure remains the same, credit bureaus use different methods to arrive at your credit score. Based on your credit history, these bureaus assign you a credit score between 300 and 900. As they use different algorithms to arrive at a number, different bureaus might assign you different credit score. This should not be a cause of concern for you. However, if there are wide gaps between the score assigned by two bureaus, you might like to find out why that is.
- In case you see any discrepancy with regard to the data, you must immediately approach the credit bureau to rectify the error. Be mindful of the fact that it takes days before your credit report starts reflecting the updates numbers. In case you are in a rush to get a home loan, make sure there are no issues with regard to your credit reports.