Y
our credit score is one
of the most important
indicators of your financial
health. It is important as
it provides credit information to a
lender. A good credit score improves
your creditworthiness and increases
your chances of getting a loan at
reasonable rates. It also provides
you protection against identity theft.
It has now become easier to check
your credit score at credit bureaus
and fintech portals.The Big Four
There are four credit bureaus in
India—TransUnion CIBIL, Experian
India, Equifax India and CRIF
Highmark. Under Reserve Bank
of India guidelines, credit bureaus
follow the same 300-900 range for
calculating credit scores. The credit
report provides detailed informationon the consumer’s credit history.
“Since they are calculated differently
based on proprietary algorithms,
the score for the same person from
different bureaus could be different,”
says Parijat Garg, vice president,
CRIF Highmark. Under central bank
norms, one can obtain credit report
and credit score from credit bureau
websites for free once a year. Fee will
be charged for subsequent reports.
For the consumer, it is importantto get both report and score from
each bureau. “You may find your
bank/lender using credit bureau
B, whereas, you had checked your
credit score from credit bureau
A. Whenever you get your bank
to clear off an old due or correct
some information, it is important
to ensure that it reflects at all credit
bureaus,” says Garg.
Credit bureaus have tied up
with fintech lending portals to
provide credit data. “Our fintech
partners offer free credit reports to
their consumers with the explicit
consent from the latter and their
requirement for a loan. These
partnerships play a key role in
bridging the demand-supply gap,”
says Vaishali Kasture, managing
director, Experian Credit Bureau and
Country Head, Experian India.Review your report
“A key reason to review a credit
report is to keep a close lookout
for incorrect or erroneous reporting.
Inaccuracy in a credit report that
resulted from account-related errors
can jeopardise someone’s credit
score. Further, this could hamper
one’s chances of qualifying for
credit, such as, a credit card or loan,
costing the borrower money,” says
Kasture. “As fraud trends are on
the rise in India, this will be a good
check against fraud, i.e., check if
your identity has been misused,” she
adds. Customers should, thus, check
their reports with credit information
companies at regular intervals,
even when they do not have any
credit requirement.How to Track Your
Credit Score and Earn
Cheaper Loan Rates
A neat credit history makes it easier to borrow
money at reasonable rates, says Anagh PalHRusHikesH MeHTa
Vice President & Head - DTC Interactive, TransUnion CIBIL“If you’re going to apply for a loan, it is
prudent to check 9-12 months before you do.
This will give you ample time to review your
credit history and take remedial action”66 Outlook Money March 2018 http://www.outlookmoney.com
Credit Score