If this is the first time that you are reading your credit report, the probability of it being an information overload is overwhelmingly high. Additionally, if you have a long list of loan accounts and/or credit cards over a period of time, the task can be daunting. Understanding the positives and negatives and how the credit report is important to your financial well-being is vital.
Simply put, a credit report is a history of how you have managed your credit in the past and what you are currently doing with it. In other words, it is a document that outlines your borrowing as well as repayment history.
The credit score calculation that appears as part of the credit report is a mathematical representation of your creditworthiness to a prospective lender. This information is key as it helps in their decision making process whether to extend any credit to you as a borrower, what interest rates to charge and if you need to put up collateral at all.
There are 4 major credit bureaus in India - TransUnion Credit Information Bureau (India) Limited or CIBIL, Experian, CRIF Highmark, and Equifax that maintains credit reports for all consumers based primarily on information reported by lending institutions. Individuals can access their platforms online to check their credit score.
Every credit bureau has their individual method of creating a credit report. That said, the report is usually divided into these following sections:
The objective measures of your financial reliability, or creditworthiness, can be found on your credit report. Taking into consideration a number of factors, the credit report highlights a numerical value known as the credit score. History of defaults on loans or overdue payments on credit cards, delayed payments, a high debt-to-income ratio, etc. will result in a low credit score. On the other hand, if you have a track record of paying your bills on time, repaying loans within its tenure, no history of overdue payments or default, and a low debt-to-income ratio, you can expect your credit score to be on the higher end.
Having a positive credit score can open the doorway to new opportunities.
You can improve your credit score in these simple ways.
Check your credit report here free of cost today! Depending on your credit score, you can avail exciting offers on SMFG India Credit personal loans. Apply online today to know more.
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