Let’s Answer 5 Frequently Asked Questions About Credit Score!

Three digits that have the power to shape your world: your credit score. The higher the score the better are your chances of dreams becoming true. Not only you will have easy access to loans but will also be offered lower interest rate, which means taking the loan will cost you less overall and you could save a substantial amount over the course of a lifetime.

And when something impacts your life that much, don’t you think you should be familiar with it? The sad story is that tens of millions of Indians are taking a blind approach to their money. Everyone wants their finances to be in good shape, but only a few tend to work towards maintaining a good credit history.

Here we list down 5 important and basic questions about credit score to get you started:

1. What is on a credit report?
The short answer to that question is: A lot! A typical credit report will include personal identifying information: a list of credit accounts (including credit limit), type of account (credit card, home loan, auto loan, etc.), and your payment history on those accounts. Each of the four major credit reporting bureaus compiles data from sources such as banks, NBFCs etc that extend you credit. Based on all this data, companies may calculate a credit score to reflect your creditworthiness. Since each of the credit reporting bureaus provides a score, you may have at least four scores. Bits and pieces of your credit history may vary slightly among the four companies because not all businesses supply information to all three agencies. However, the broad picture of your credit history should be relatively consistent.

2. What Types of Information Can Impact Your Credit Scores?
The two most crucial factors that affect your credit score is your repayment of the loan and how timely you pay your EMIs and card dues. If you are a month late in paying your dues, then your credit score might drop by 80 points. Next up is, credit inquiries. They can affect your credit score in a major way. There are two types of credit inquiries, soft and hard. Soft Inquiries are harmless to your credit score but the hard inquiries that are often done by lenders before lending money to you can bring a change in your credit score even if you do not get the loan in the end.

Opening new credit accounts can or taking new loans also affect but it can be fixed with regular and timely repayments. Lenders evaluate the credibility of the borrower at their own discretion. They may use whichever scores they’d like and measure those scores on a scale that is unique to them. It’s also possible that they may not even consider credit scores at all but just the contents of the credit report.

3. Your Score Is Less Than 700. Now What?
Check your credit score yearly, at least to avoid surprises! With CRIF you are entitled to one free credit report every year. And no, your credit won’t take a blow if you do this – it’s considered a “soft” inquiry. If your credit score is lower than 700 then you should dig deep in your credit report and find out the reasons for bad credit score. Look at your credit card balances and credit utilization ratio. The closer you are to hitting your maximum limit, the more it may lower your score, so pay down those balances if you can. Check out for errors/information listed in the credit report not undertaken by you, in that case, you should immediately report to the credit bureau or the banks to update your information.

Abruptly closing your credit cards with a long credit history can affect your credit score in a negative way. How long you’ve been borrowing affects your score. The longer the better.

4. How long does a bad credit rating last?

Debts have a finite duration, and so does negative information that appears on your credit report. All negative information on the credit information after 7 years often start to value less for the credit score. Make sure all your payments and your credit activities are timely and regular to show stability in your credit behaviour and eventually pushing your credit score towards the good side.

5. Who Can See Your Credit Report?
Your credit report information is not available to the public and can be accessed only you’re your permission. When you apply for a loan and credit card then your permission is required as the lenders and banks need to investigate the information to determine your creditworthiness and your potential and ability to pay back the borrowed amount.

Now that we have explained the basics of Credit Score, wait no longer, follow these steps and start building a good credit history now!

5 Easy Tips To Pay Your Loan Without Any Hassle – An Infographic

Penetration of Fintech firms and easing of lending norms by the banks have led to easier availability of loans for many.  While it has become easier to avail loans or credit, it is very much necessary to understand that the repayment must be done by the borrower within all the deadlines.

If you also find it difficult to repay your loans, you may need to tweak your approach. Here are some strategies that can help you manage your debt situation and credit score better.

CRIF - Infographic- 5 Easy Tips to Pay Off Your Loan Amount Without Hassle

What To Do If Your Business Credit Score Is Low? – An Infographic

Business credit scores are crucial to a business’s health and success. A higher credit score means you can easily avail loans. A low credit score could prevent you from availing any loan at all. The good news is that if you find yourself with a less-than-stellar business credit report, you don’t have to worry: there are many ways through which you can quickly improve your business credit score. Some ways are more obvious than others, and that’s why we’ve created this quick snapshot to help you improve your business credit score.

Six Things To Do If You Become A Victim Of Identity Theft

Identity theft occurs when someone uses your name, credit card number, or other personal information without your knowledge & permission. This personal information is often misused for performing fraudulent or criminal activities. How your information is stolen, and how it is used, may vary. For instance, your PAN card number could be used by thieves to falsify their income and credit history when they apply for a loan, open new lines of credit or file taxes.

There have been instances where people, whose identities have been stolen, have spent years of time & money cleaning up the mess left behind by the thieves. So, as soon as you suspect that you’ve been a victim of identity fraud, take these steps immediately to clear your name and your credit:

1. Lock the concerned account & register FIR: Almost all the banks provide an instant SMS acknowledgment service to verify your purchases. When you start getting messages on your phone about a purchase which was not made by you, contact your bank or lender or insurance company immediately to lock down the account. The next step is to register an FIR in the respective police station to legalize your complaint to find out the fraudster.

2. Put a fraud alert on your credit reports: You can contact one of the credit information companies such as CRIF and place a fraud alert on your credit report. A Fraud alert notifies lenders to verify your identity before extending any credit, by calling you at a phone number you provide. You can either place a temporary alert which lasts for 90 days or an extended fraud alert which lasts for 7 years. The latter can only be issued if you can prove that your identity has been stolen. Another option—and a more effective identity fraud prevention measure—is to place a security freeze on each of your credit reports. A freeze prevents creditors (except those with whom you already do business) from accessing your credit report(s) at all. Most new applications will automatically be declined because, without access to your file, the creditor will have no way to assess your credit. Unlike a fraud alert, in case of security freeze, you’ll need to contact each credit information company individually to place a freeze on your files.

3. Check Your credit reports: After installing a fraud alert in your credit file, you’ll automatically receive a free credit report from each of the four agencies, and you will be opted out of preapproved credit card and insurance offers. Once you receive your free reports, make note of the unique number assigned to your account. This will be helpful in all your communications with the agencies. Check your reports for signs of fraud — new accounts you didn’t open, hard inquiries you did not make, payment history you can’t account for, an employer you never worked for and any personal information unfamiliar to you. Check your credit reports at least once over the course of the next year to check for fraudulent activity.

4. File a police report: Alert the police in your city. You may also need to report the theft to the police departments where it occurred. Make sure to get a copy of the police report and/or the report number. Although the police may not be able immediately helpful if your identity was stolen by criminals online and overseas, your report could help them track down someone who is stealing information locally.

5. Close existing & Open new financial accounts: Identity fraud victims should talk to their banks & financial institutions to determine how they can further avoid the damage. They might require you to close existing accounts (even the ones that haven’t been compromised) and reopen new accounts. It can be a tedious process, but a necessary one to avoid a future incidence.

6. Tighten your account settings: Regularly update passwords to all your online accounts. Make sure they are strong containing a mix of letters, numbers, and symbols. Avoid using the same password for multiple accounts. Delete any personal information such as addresses and phone numbers of public profiles on social media and other sites.

We hope the above steps will help you fight the battle against identity theft!