Know the relevance about Credit Report

The top priority of your financial habits should be to review your credit report. Slowly and gradually, more and more people have started to know about the credit report and maintain a credit score, contrary to popular belief credit report does not contain credit score. Around 74 per cent people in India check their credit score at least twice a year, according to a survey conducted by TransUnion CIBIL Score. When enquired the people checked their credit report only to improve credit score or get a new car loan or home loan.

What is Credit Report?

According to Katie Ross, education and development manager at American Consumer Credit Counseling, a national financial education nonprofit located in Auburndale, Massachusetts, “a credit report is a history of everything you are doing with your credit now and what you have done with it in the past. A credit score mathematically represents the information in your credit report. Your credit report and score affect your ability to get credit and the terms/rates of that credit.”

What is in Credit Report?

A credit report consists of personal information, credit account information and it might also include information on overdue child support provided by a state or local child support agency or verified by any local, state, or federal government agency.

  • Your name and or any nickname which is used to open a credit account
  • Current and former addresses
  • Birthdate
  • Social Security number
  • Phone number
  • Liens
  • Foreclosures
  • Bankruptcies
  • Civil suits and judgments
  • Current and historical credit accounts, including the type of account (mortgage, instalment, revolving, etc.)
  • The credit limit or amount
  • The date the account was opened and closed
  • The name of the creditor
  • Account balance
  • Account payment history

Why Credit Report Is Important?

Your credit report is important for the financial future. The credit report is used to make financial decisions like employment opportunities, auto insurance rates, whether you can obtain a home, car or credit card loan or ability to rent a home or apartment. It is advisable to check your credit report at least annually. Managing a positive credit report is necessary because lenders will use the report to determine lending rates provided to customers.

Things To Keep In Mind While You Check Your Credit Report

It is important to check the report annually to ensure that all the recorded data is appropriate.

  • Sometimes reports do contain errors which can prevent you from getting the best rate on a car loan, home loan, or credit card. So check the submitted information is correct.
  • Know what is in your report as it will help you prepare the answers to question which will be asked by the lender when you apply for loan or credit card.
  • Check credit or collection accounts, inquiries to see your credit report from creditors, creditors might also look at your credit to offer credit. Check the account section of the credit report. Check all these information to avoid theft and fraud.

Tips To Improve Credit History

If you want to earn good interest and avail any type of loan without any problems then it is necessary to maintain a positive credit history which can be done by taking the following steps:-

  • Pay bills consistently and on time
  • Check credit reports annually, disputing any errors that hurt your report
  • Apply for credit only when needed, keeping credit inquiries to a minimum
  • Maintain reasonable amounts of unused credit

Check Your Credit Report For Free

In 2017 Reserve Bank of India (RBI) made a standard for all the credit authorities in the nation to give one free credit report to customers in a schedule year. Presently, there are a sum of 4 credit authorities in the nation viz – TransUnion CIBIL, Equifax, Experian Credit Information Company and High Mark Credit Information Service. This basically implies you can get four credit reports in a year.