Be it a general curiosity or a loan requirement, we all end up checking our credit scores once in life. And this usually comes into the picture when we are making any type of loan request. But being aware of the information like what is a credit score and how it works, before checking is as much important as building one. Moreover, it is good to assess your creditworthiness for a better customer value and experience.
Are credit scores and credit reports the same?
Often times people get confused between a credit report and a score. A credit score is a typical score check of your past credit transactions and ratings expressed in three-digit numbers and a credit report, on the other hand, is an overall depiction of your credit score either by digital or physical representation.
And as seen earlier, our credit score is built upon various factors like our payment and transaction history, credit cards utilization, account types, and loan inquiries we have had so far. Hence, it has to be noted that the overall consistency is what matters. Now, let’s dig deeper into how you can measure your credit score smartly.
Why should we check our credit scores?
Keeping a careful eye on your credit score is critical. Because it is the most accurate means of determining your odds of obtaining a credit line. Another reason to keep track of your credit score is to see whether it drops or if credit bureaus make an error when calculating it. You’ll be able to make timely corrections as a result of this. Checking your credit report demonstrates that you are responsible and keep track of any inaccuracies in your credit report and try to improve them. Also, make sure to keep having a check on your credit if some errors might have crept in.
Look out for these parameters while checking your credit score
We all know what a credit score has to do with our loan approval possibility. An impressive credit score makes us not only eligible to take up a loan but also gives you the opportunity to avail at a low-interest rate. And especially for personal loans approval. We take loans to obey different obligations in your life which require funding. Lenders in such situations are always willing to help and give you advice on how to handle your present financial condition.
To qualify for loans, work on improving your credit score before applying. However, this may enhance your chances of getting a loan promptly. The prerequisites available in Buddy Loan will help you get a better insight into your credit report.
To fetch your credit report, it is always advisable to keep these notable factors in mind to avoid any sort of confusion and to gain a better experience.
- Understand the special abbreviations and terms: Things will be sort easier if you are aware of all the acronyms and technical terms to get a clear understanding. like short forms and certain abbreviations mentioned in the credit report.
- Detail to account and personal information: Primarily, give confidential information a vigilant glance like Individual’s name, address, and other personal and bank account details like PAN card and contact number, etc. for a safe and secure process.
- Check and make your budget: You get used to the sense of earning your own money and spending whatever you want during your early years. It could lead to a habit of circling credit card payments or delaying payments without considering the repercussions. So, it is suggested to avoid maxing out your credit cards and learn to budget. Because factors like such can damage your credit/CIBIL scores, making it difficult to obtain a loan when you need one. If at all feasible, avoid using revolving credit or opting for the EMI/cash withdrawal option.
- Observe your payment and transaction patterns: Being aware and mindful of your spending habit is worthy of self-appreciation. This not only improves your money managing capabilities but also helps in a decent credit score.
- Read through the lender’s inquiries and details: While many lenders are free with their terms and conditions and have an open-end service with loans and queries, sometimes when checking your credit score it becomes vital to go through inquiries made from their end as well.
- Watch out for illicit and harmful actions: Be alarmed when you find any suspicious activity. We witness a lot of frauds and examples of fraud all around us. This might be someone proposing to lend you a loan through illicit means. In the current digital age, it is easy to maintain track of fraudulent acts or theft. A fast tip to help you protect your Credit is to obtain a credit report every four months. Because even the tiniest alterations can assist you to figure out if it’s a hacker or a theft attempt.
You will be able to take fast action if you receive information that your credit score has plummeted and discover a new account that you didn’t open or a credit card that you haven’t used in months suddenly has a large debt.
Perhaps you are now spending the majority of your time enjoying yourself without any sort of structured plan in place. However, if you can convince yourself to do just one of the activities listed above, you will have a wonderful time for the rest of your life. In this regard, there are a lot of options available in the industry to seek guidance from and Buddy Loan can also help you with such financial assistance as re-evaluating your credit report, so the next time you land into your past transactions to get a loan approved with an attractive interest rate, you have the best credit score.
- What is a credit score?
A credit score or commonly called CIBIL score is simply the creditworthiness of an individual depicted by a three-digit code typically ranging from 300 to 900 based on his/her past credit history and rating built by consistent transaction and performance.
- Why should we maintain a good credit score?
To complete many necessities in life, we need money and sometimes we don’t have a big amount readily available so we take out a personal loan but banks or other lenders provide us loans only when we have a solid credit score to gauge our repayment capacity.
- Does making multiple loan inquiries harm the credit score?
Many people are concerned that checking or inquiring about their credit reports regularly would hurt their credit score. When you apply for a new credit line, financial institutions and banks do inquiries regarding your financial background and income. However, the loans you inquire about which are either under process or rejected severely affect your credit score.
- How often should one check his/her credit score?
Although it is not mandatory to keep a check on your credit score daily, regularizing at least once in 3 to 4 months is sufficient.