As we all know, credit scores help us get loans and credit cards quickly. You get three unique reports, one each assigned for the three prime Indian bureaus that are –
- Equifax and
Bureaus contain information about the borrower, that is you. However, even a minute error can cause the declination of your loans and credit. To avoid it, You can make it a habit to check credit reports every three or four months. Keeping a check on credit reports helps us prevent unwanted theft and errors by lenders. Also, if you find mistakes, you can take swift action against them. Checking credit scores and reports is like going to financial checkups, and it ensures you’re in the best position to avail credit.
Information in credit reports:-
Personally identifiable information (PII) –
Your name, social security number, address, date of birth and employment information are used to identify you. This information is acquired by what you lend while applying for credit, which is not used to calculate scores.
Credit Accounts –
Lenders report on each account you open like the type of account – (credit card, mortgage, auto loan, etc.), your credit limit or loan amount, the date you opened an account, Accounts balance, payment history and timely payments. This information is used to calculate scores, So it is vital to keep a check on your accounts and maintain standards.
Public collection and records –
The Credit bureaus accumulate public record information from the country and state courts and bankruptcies. Credit reports also have debt that is overdue and is sent to collections
Credit enquiries –
While you apply for a loan, you can request the lender for a copy of the credit report, so this is an inquiry that appears on the credit report. The list of everyone who accessed your credit report for the last two years will be in the enquiry section.
The credit report shows the list of both enquiries –
- A hard inquiry is when your credit request does encouragement and incentives to the lenders. Hard enquiries are visible only to you. Soft enquiries won’t change your score.
- Soft enquiries are when lenders order for your report to send you a pre-approved credit offer via mail. Lenders are accessed only to hard enquiries on your credit report. Multiple hard enquiries are riskier and decrease your score.
Beneficial tips for check-in credit reports:-
Is the account yours –
First, inspect open and closed accounts. Check if information in credit reports and loan repayment history belongs to you. If you come across false information, react quickly to correct it immediately. Your credit score can decrease if the account has false and negative status or shows you a high outstanding balance.
Check if you made the enquiries –
Soft enquiries like inspecting your credit scores will not have any adverse outcomes. Haven’t you checked yet? You can check your credit score in Buddy Score easily and pretty quickly. However, hard enquiries like applying for several loans and credit cards in a shorter period have an unfavourable effect on your credit score. So importantly check the enquiry section, if you mainly make all the enquiries. If there is any other enquiry other than you made, then it is considered theft. It indicates that someone else is trying to open an account with your details. These must be raised as a complaint as soon as possible.
Appropriate personal information –
Personal details such as name, employment, address and details etc., do not directly affect your credit scores and financial history; it is still wiser to keep all this information updated. In the future, lenders may base this information on lending offers and make decisions. Incorrect information can cause you to lose a reasonable offer!
Don’t worry about your personal information not being updated. If the process of updating your credit is completed, then ask your lenders to update to credit bureaus shortly immediately.
Check if accounts information is correct –
You must check your listed account’s suspicious activities and incorrect reporting. Your old payments have a notable impact on your credit score. Lenders are supposed to send your transactional related updates to credit bureaus, which are incorporated in your credit reports.
Missed payments, delayed payments, etc., can decrease your credit scores exceedingly. You have to react attentively, keep track of mistakes and regularly check your reports. There might be many errors in your reports, and the output is suffered solely by you. Tips – have you made a late payment? You can seek a request from your potential lender to eliminate it from your credit report.
Specific essential items to look into credit report:-
Delinquent debts –
- It is essential to check delinquent accounts and past due bills in your report. Checking is the way you can get rid of negative items and disputes, and this is a better way to deal rather than dealing with collections and charge-offs.
Your credit utilization ratio –
- It measures the amount of revolving credit. If the ratio goes beyond 30%, It could decrease your credit score. So pay close attention to numbers. Your credit report will show your outstanding credit card balances. You can take up steps to minimize your utilization either by seeking higher credit card limits or paying the current debt.
Credit enquiries –
- Every time you apply for a loan and credit card, you’ll get a hard enquiry on your report. So enquiring one or two times will not affect your credit, but enquiring numerous times within a short period will decrease your credit score.
- Check the source of enquiries in the credit report. If a credit card company or a lender withdraws your credit, but you have not applied, check if someone is using your personal information to access an account in your name.
Reporting errors –
- Unfortunately, errors in credit reports are common but rectifying them should increase your credit score. Check if credit reports list open accounts and loans each only once. If the listing is a duplicate, then it will decrease your credit score.
- Also, look for new accounts you haven’t opened; it could be fraud or an error by bureaus.
Don’t forget to continuously verify and check information on credit reports and make the necessary changes and payments. So you obtain the best scores, and you can check accurate scores using Buddy Score. If you want an instant loan or personal loan, you can check the Buddy Loan website.