In India, the end of the year means a flurry of activity and expenses for consumers. We hop from the festival season, straight into wedding season, and then the holiday season without respite. All the occasions call for considerable spending, and while we’re in the thick of the festive mood, we may not have the time to check our finances to ensure nothing is amiss.
But did you know, while we’re out celebrating and spending time with our loved ones, shopping scams and credit card fraud are at their peak! Though you may not have fallen victim to any such fraud yet, it is good practice to check your credit report regularly to spot things that don’t look quite right. Catching errors in time allows you to dispute these transactions before they have a lasting impact on your credit score. A higher credit score means better offers and loan terms that could save you money, so your goal should be to maintain a credit score of 750 and above.
Here are 4 reasons why you should check your credit report regularly, even when you’re too busy.
1. To check for searches on your account (both hard and soft)
Every time you apply for a loan, whether it is an educational, personal, car, or business loan, the lender checks your credit report before making their final lending decision. When a request for your credit report is made by a lender and is associated with a credit application, it is known as a Hard Pull of your credit report.
Alternatively, when you check your own credit report or when CreditEnable checks your credit report, since these enquiries are not linked to any credit application, they are called Soft Pulls and have no impact on your credit report.
By checking your credit report regularly you can track which lender checked your credit report when, and if a loan application wasn’t submitted by you, can flag this with the credit bureau for a fraud enquiry. Alternatively, if you have a common first and last name, like Neha Sharma, the credit bureau could get confused and add another Neha Sharma’s loan application to your credit profile or they may add your debt to someone else’s profile!
These mistakes have a deep impact on the debt available to you, and therefore, checking your credit report regularly and catching these mistakes is important.
2. To ensure all the accounts listed on your report belong to you
Same as above, reviewing your credit report helps you check whether all your accounts are in it. If an account is missing, you can dispute it with the credit bureau to have the account added to your credit profile. Having all your accounts on your credit report is important because it lets a lender know the status of your financials.
Alternatively, this will also help you catch any accounts fraudsters may have opened in your name, which you can then flag with the appropriate authorities. This is critical because if such accounts are used for criminal activity, you may get into trouble as the account is associated with your name and identity.
3. To make sure your EMI payments are recorded correctly
If you’ve already borrowed a loan from a formal lender or already paid one back, your credit report will have a record of all your EMI payments.
When you check your credit report, you can look out to ensure the EMIs you have already paid are included in the report. If any EMI payment is missing, you can flag that with the bureau before this missing information has a lasting impact on your creditworthiness and future loan prospects.
4. To gain insight on how certain expenses affect your score
Every time you make a credit decision, like opening a new credit card account or closing a line of credit you don’t use anymore, it impacts your credit score. Some of these actions bump up your score, while others may reduce it. Regularly reviewing your credit report helps you track the different financial decisions you made in a given period and notice how they impact your credit score.
Once you find patterns in your financial behaviour and credit score, you’ll know what actions help increase your credit score and can use that insight to make more intentional financial decisions to keep your creditworthiness high.
How do I register a complaint if there is wrong information on my credit report?
There are four credit bureaus in India that are authorized by the RBI to prepare credit reports for individuals and companies. These are:
The four bureaus have slightly different methods and algorithms to prepare your credit report and assess your credit score, but all of them use five main criteria to analyse your credit history:
- Repayment history
- Type of credit
- Age of credit
- Credit exposure
- Credit inquiries
If there is incorrect information on your credit report, you need to contact the respective bureau to have it corrected. To dispute errors on your CIBIL report, click here, and to dispute errors on your Experian credit report, click here.
How do I check my credit report?
You can check your credit report by submitting a request for it with one of the credit bureaus, TransUnion CIBIL, Experian, Equifax, and CRIF Highmark, for a set price. As mentioned above, when you check your report is has no impact on your credit score.
If you’re checking your credit report before applying for a business loan, use CreditEnable’s technology platform to check your credit score and apply for the loan at no cost! When you use our platform to apply for a business loan, we check your Experian credit score and send a copy of your Experian report to your registered email ID so that you know where your credit stands. This way, we can match you with one of our 25+ lender partners who is most likely to give you the business funding you need, and you can get your money quick without impacting your credit score!
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