Many of you do not consider examining your credit score unless you apply for a loan. However, a few of you may avoid checking your credit score as you may be afraid of knowing your score and some may avoid this as you are unaware of the importance of credit profile and score in your financial life. Besides this, few of you even hold the myth that reviewing your score may impact your credit. However, do not fret, here you will clear out all your doubts, which will reveal the importance of checking your score periodically. Note that all lenders including SBI check credit score to understand your credibility. Usually, most lenders check your credit score for free. For instance, SBI free CIBIL score is performed by the lender on receiving your credit application to understand your creditworthiness.
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What Are The Crucial Reasons For You To Review Your Credit Profile And Score?
Be Aware Of Where You Stand –
Your credit score shows your financial health and avoiding your score can have a severe impact on your finances in the future. No matter whether it is a good or bad deal, there are specific measures, which you must ensure to follow step by step to ameliorate your credit score.
Ensure To Keep Your Credit Profile In Excellent Shape –
In case you are applying for a credit option, you cannot make your score up to mark in just a few days. The ultimate fact is your score takes several months to build and get reflected on your credit report. And assessing your score periodically gives you substantial control of maintaining the same.
Ensure Your Credit Info Is Accurate –
Your credit profile and score are basically the numerical representation of your past credit behaviour reported by the lender. So, in case your score is lower than expected, you may need to review your report as your report may contain mistakes or errors that must be disputed with the bureau. If you see any mistake or error, you can directly write to the bureau or you can even ask your lender to endow the right details to the concerned bureau.
Predictability Of Your Credit Application –
If you are not aware of your score before putting in the application, you may not be able to predict the result. However, knowing where your credit score from beforehand prepares you for possible results – like when your score is 750 and above, you can simply predict that your application for a loan may get approved and when it is low, then you can predict there are lesser chances of loan approval.
Additional Reading: Check CIBIL Score by Pan Card
Knowing Your Score Can Highly Empower You –
The higher your score, the better it is for you to get an attractive rate of interest on your loan. So, when you review your score periodically, it empowers you to better negotiate with the bank for a lower loan rate.
Respond To Changes Swiftly –
Reviewing your credit score on a periodic basis can assist you to take the required steps way sooner. In case you see that your score is poor, you can use this info in your report to know what may have created the change. And thus, you can take the required measures accordingly to rectify your score. In general, timely payments of your prevailing loans and credit card dues can ameliorate your credit score over time. However, in case you are looking for any big-ticket credit option and your score is not in a good condition, then you may take small personal loan proceeds and repay the same fast so that there’s a great reflection of the same in your score.
Know When You Can Get Better Loan And Credit Card Offers –
Reviewing your score periodically even makes you aware of when you are more probable to access the credit card or loan in better conditions. A good score enhances your credibility and endows you access to additional credit at suitable terms like a lower rate of interest for your auto loan, home loan, personal loan, education loan, or higher credit limit on your credit card application.
Besides these, the next crucial benefit of reviewing your credit report is, it notifies you regarding any changes in your credit profile and score, and simultaneously any incorrect or wrong update may be corrected instantly by raising a query with the concerned authorities, which ultimately enhances your credit score.
Frequently Asked Questions (FAQs)
Where Can You Check Your Credit Score?
You can check your credit score online by visiting the site of any credit info companies like Equifax, CIBIL, Experian and CRIF Highmark. Alternatively, you can also check your credit score through online lending platforms too on a monthly basis.
How Often You Must Monitor Your Credit Score?
It majorly depends on you; however, a monthly report review must be sufficient to keep you informed about changes, which may show up in your credit report and this may be responsible for impacting your score.
What Are The Fees And Charges For Checking Out Your Credit Score?
There is no specific fees and charges incurred for reviewing your credit score.
Can Checking Your Credit Score Result In A Fall In Your Score?
No, reviewing your credit score is referred to as soft inquiry and this does not impact your credit score. Hard inquiries raised for checking out your credibility by credit issuers or lenders may impact your score tremendously. Other ways through which your credit score may be impacted are if you miss out on your credit card dues and loan EMIs, have an imbalanced credit mix, do not report any mistake on your credit report, use over 30 per cent of your credit utilisation ratio (CUR), etc.
What Are The Important Components Of Your Credit Report?
The major constituents that make up your credit report are your contact details, personal information, employment information, enquiry information and account information. Ensure to input all these components, to fetch your credit report either through online lending markets or by visiting the credit bureaus’ sites.