Credit score check in 5 minutes: Know how to do it

A person’s creditworthiness is statistically represented by their credit score check. It helps in examining one’s capacity to repay the sum that an individual borrowed. A person’s credit score typically ranges from 300 to 900, and the applicant with the highest score is regarded as reliable by banks and financial institutions.

Always seek to be at the top of the range because doing so is advantageous when applying for a credit card or loan. In contrast, if a person’s credit score check is low or they fall into a lower range, this shows that the person is an irresponsible and unreliable loan applicant who has not paid loans or other obligations on time.

Need of Credit Score Check:

One must pay close attention to an individual’s credit score. It is the most accurate way to assess their likelihood of receiving a credit line. This is why it should be monitored in order to find out if credit bureaus made a mistake when calculating it. This will enable the credit applicant to promptly make amends.

A person can gain a better understanding of one’s current credit position by checking an individual’s credit history as well as free credit scores. Checking the credit reports often can help individuals become more conscious of what potential lenders might see.

A person can also find any incomplete or inaccurate information by checking their credit reports.

Guidelines For Obtaining An Individual’s Free Credit Score Check

  •   There are various websites available for free credit score checks. Visit a website for the same.
  •   Put the first & last name in the name section.
  •   Enter the person’s email address as well as mobile number.
  •   Put the registered mobile number to receive an OTP for verification.
  •   Then, a screen with your credit report and score will show up.

Factors Affecting CIBIL Score Using Free Credit Score Tool

It is crucial to make sure that a person’s CIBIL score is always on the higher side. Knowing what influences one’s credit score and taking appropriate action to manage those influences are essential for achieving this. Here are the factors that determine your CIBIL score:

  •   Income of an individual.
  •   Debts an individual currently owes.
  •   Previously made credit card payments.
  •   Any missed payments from prior credit, late payments, or other issues.
  •   Loan applications that you have submitted are rejected.

How Can Outstanding Debt Affect Credit Score?

The credit score is impacted by the total amount of outstanding debt. This is typically examined by lenders through the credit utilization ratio. It is the percentage of an individual’s available credit that the person is currently using.

A person’s credit score will decrease with a high ratio. It does not imply that individuals should avoid debt. In actuality, individuals can only raise their credit score by taking on debt. The most important thing is to pay it quickly and avoid going over one’s credit card or bank account’s limit.

There are two reasons why having unpaid debt hurts credit score.

  1.     The Credit Utilization Ratio is Maximized:
  •       30% or less is a decent credit utilization ratio.
  •       A high ratio indicates excessive credit use, which can lower credit scores.
  1.     It Makes it Challenging to Repay Future Loans:
  •       If a person has unpaid debts, an individual may already be paying a high EMIS rate.
  •       Taking out additional loans in future while still having a debt to pay off could result in bankruptcy.

The Need For Credit Score Check For Businesses

Manufacturers and government agencies closely examine business credit reports when awarding utility as well as business contracts. Businesses’ credit reports include details about the location, owners, employees, profit as well as loss, liability, assets, any pending legal matters and much other information. Depending on the type and quantity of information they contain, these credit reports may be pricey.

How is Credit Evaluated?

Banks send information about transactions an individual has made to all 4 credit bureaus when they are relevant to determining a credit score. The RBI has mandated that information be sent to each and every credit agency. Several guidelines have also been set up by SEBI for the credit rating agencies to follow. In essence, banks inform Credit Information Companies about spending patterns.

Any of the bureaus can be contacted by a bank if they need to do a credit score check online. It makes no difference which one an individual has chosen because they will all receive the same grade from a person because they are all equally credible and equal in value.

Credit bureaus begin gathering additional data about one’s spending choices from other banks as well as financial institutions after getting data from the bank. After processing this data, the credit bureaus create what is known as a Credit Report.

Factors That Do Not Impact Your Credit Score

An individual’s CIBIL score is not influenced by investments like PPF, FD, ULIPs, Mutual Funds, etc. While part of how fixed deposits work includes the option of a loan against FD, you should know that this type of secured loan is not offered on the basis of your credit score. Since FDs are regarded as safe, it offers guaranteed returns over time, banks are willing to lend you the money using the FD as security and can legally seize the deposit if you are unable to pay back the loan. Similarly, other investments and your bank balance are not tracked by Credit Bureaus and do not impact your credit score.

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