How Can You Read Your Credit Report? Know Here.

Credit report refers to a collation of your credit past record, which is utilised to determine your score. A strong score is the initial and foremost need of any financial institution. The report, thus, must be periodically checked by you for any mistakes or errors, misspellings, or incorrect updates. It generally consists of various sections that have specific information on every category. For instance, suppose you want to avail an SBI loan, then your lender would assess your SBI CIBIL score to understand your repayment potential. Remember whether it is a personal loan or any other loan, SBI personal loan CIBIL score check or check of your score for other loans is important for you too as a borrower of a loan. Here in this article explained are the components of the credit report, which you must consider assessing periodically. 

How can you assess your credit report?

Let’s study the distinct elements that are present in a credit report – 

·       Personal information – 

This section covers all personal information linked with consumers and involves sections like address, name, birth date and previous & current accounts. It might have discrepancies owing to incomplete addresses or misspellings and thus is important to not skip this section and instantly contact the bureau in the case of any errors. Additionally, erroneous information within personal info can infer a probability of financial fraud. 

·       Account details – 

Account details contain all details linked with your credit account – both previous and current. The critical information involves – 

·       Account type

·       Creditor’s name

·       Account balance

·       Payment status and history

·       Loan amount

·       Ownership information

·       Credit limit available

·       Account number

·       Account opening date

The user must ensure to go through all such information to authenticate their accuracy as these points have a direct impact on credit score.

·       Days past due details – 

DPD (days past due) is the payment time frame for every credit account, which is stated numerically or in the form of a remark based on the update. It covers everything from payment delays to bankruptcies filed by users. In the case a section shows ‘000’ it means that there are no overdue and payment has been performed timely. Likewise, ‘XXX’ shows the financial institution has updated the details linked with credit for a particular month you are checking. Any other details in your credit report suggest a mistake or delay in repayments. 

·       Inquiries – 

This is a portion that includes info linked with inquiries performed by banks, lenders, and other crucial financial institutions to review your score. While soft inquiries have no impact on your score, multiple direct hard inquiries in a short period of time can lower your credit score. 

Also Check: SBI Personal Loan CIBIL Score

Credit report and score impact your eligibility for a loan

A score is the outcome of a credit report and generally ranges anywhere from 300 to 900. It primarily is used to determine your loan eligibility, involving your amount and terms. Read on to know the range of the score and what it displays. 

750 – 900 – This is an ideal credit score range that permits you to avail a loan at a low rate of interest. 

700 – 749 – This is a good credit score that ensures your eligibility for unsecured credit options i.e., credit card, education loan, personal loan, etc. The offered interest rate here will not be high. 

650 – 699 – An average credit score, which might not fetch you a strong interest rate or a high credit limit on applying for a loan or credit card. 

600 – 649 – Your credit eligibility is doubtful with a high rejection chance. 

599 and below – This is looked upon as a poor credit score and requires instant attention. 

How can you review your score using an online lending marketplace like Paytm at no cost?

Paytm permits you to figure out your score with the assistance of an easy procedure, which you must follow step by step. Here are the important steps you must consider following – 

·       Sign in to your Paytm mobile application

·       Visit the section “loans & credit cards”

·       Choose the option “free credit score”

·       Review your score

Why is it crucial for you to maintain a good credit score?

Let’s look at some of the important parameters that highlight the importance of maintaining a strong credit score – 

·       Higher chances of credit card and loan approval

·       Chances of getting lower interest rates from banks and lenders

·       Lesser chances of becoming a defaulter

·       Access to pre-approved loan

·       Discounts on processing charges and various other fees

What are the parameters that impact your credit score?

CIBIL score is computed using four crucial parameters, each with distinct weightage. Listed here is an important breakdown mentioning the weightage given to every factor. 

Credit type & duration	25 per cent
Credit Exposure	25 per cent
Payment history	25 per cent
Other parameters	20 per cent

What are the distinct types of loans affecting your credit score?

The distinct kinds of loans that impact your credit score can be divided into 2 categories – 

Unsecured credit options

Unsecured credit options do not need you to offer any kind of security. You as a borrower are offered such loans depending on your score and distinct other parameters. Wedding loans, consolidation loans, home renovation loans, festive loans, and top-up loans are important instances of unsecured loans. 

Secured loan options

Secured loans allow you as a borrower to offer security in exchange for loan proceeds. A mortgage loan, home loan, 4-wheeler loan, life insurance loan, car loan, etc. are examples of secured loan options. 

Both loan types have some or the other impact on your score depending on your credit history. Holding an excellent score and a good financial history enhances your credit score, which allows you to get approval for loans and other credit options quickly. 

How can you check your score for free?

To check your credit score for free you must visit any online lending marketplace, for instance, Paytm. Now, here in this app, you can check your credit score by following the below-listed measures. 

·       Sign into your mobile application

·       Visit the option “loans & credit cards”

·       Choose the option “free credit score”

·       Now, you can review your score for free