#1. What does a credit score actually mean?
Simply put, your three-digit credit score typically ranges between 300 and 900 points, with higher scores indicating stronger credit history and disciplined behaviour. And how successfully you have previously handled your debt obligations’ payments, such as credit card payments and loan EMIs, reveals your creditworthiness and repayment behaviour which is reflected when you check free credit score.
#2. What elements have an impact on our credit score?
Your credit utilisation ratio, credit mix, repayment history, and number of credit inquiries are all factors considered by the four credit bureaus when determining your credit score. You can have a look at these elements in your credit report when you check credit score.
#3. What occurs if your credit score is poor or below average?
Lenders are more likely to give favourable terms and conditions as well as a wider range of options to clients who have excellent credit as your credit score is one of the most significant variables taken into account by lenders when reviewing your loan or credit card application.
If you check credit score and see that it is below 700 mark, you may have a harder time getting a loan because lenders frequently give loans to those with credit scores of 700-750 or above.
Since borrowers with poor credit pose a bigger risk to lenders since they are more likely to experience future payment default, lenders either grant loans to them at higher interest rates or outright reject their applications.
#4. Are you charged a lower interest rate on our loan if you have a high credit score?
When lenders check free credit score of borrowers, they are more inclined to treat borrowers with excellent credit scores favourably and to accept loan and credit card applications more swiftly due to their history of timely payments and decreased risk of default in the future.
As an alternative to traditional pricing, where the interest rate is determined by the applicant’s credit profile, some lenders now provide credit risk-based pricing for loans. People with good credit may be qualified for loans with reduced interest rates, which reduces the cost of the loan overall. For instance, the State Bank of India and the Union Bank of India have begun to base the interest rates on credit scores for brand-new home loans and auto loans, respectively.
#5. Do prepaid or debit cards affect your credit score?
No your credit score is unaffected by using debit or prepaid cards. When you check credit score, you can see that only credit forms such as loans and credit cards impact your credit score.
#6. Does paying off a loan early have an impact on your credit score?
No, paying off a loan early won’t harm your credit, you can confirm that when you check free credit score from any online financial website or the website of creditu bureaus themselves.
#7. Which actions can you do to raise your credit score?
Try to keep your credit utilisation rate between 30 and 40% in order to raise your credit score. You should also make regular loan payments, maintain a healthy credit mix, keep an eye on your guaranteed/co-signed loans, avoid making direct loan and credit card applications to lenders, and check your credit report frequently using the free credit score feature.
Consider paying off your unsecured debts, such personal loans and credit card loans, or replacing them with secured loans, like second mortgages, loans secured by gold, or loans secured by securities, if you want to improve your credit score as quickly as possible.
By raising the percentage of secured loans in your overall credit mix, this will improve your credit score.
#8. Does someone’s family history have an impact on their credit score?
No. The credit history or profile of your family members has no bearing on your credit score.
However, you are jointly liable for making sure the debt is settled on time if you agreed to serve as a guarantor or co-signer on a loan for a friend or a member of your family. If the primary borrower defaults on the loan or doesn’t make payments on time, your credit score will suffer if you co-sign the loan or act as a guarantor, which will be reflective when you check free credit score online.
#9. Is an individual’s salary considered when determining their credit score?
No, your monthly income has no bearing on your credit score.
#10. What is the purpose of credit reports?
A summary of your credit history is one of the components on your credit report. This comprises details regarding past credit accounts, present credit card balances, and past-due bills. When you check credit score, you get to know that it is calculated using all of this data mentioned on your report.
#11. What steps go into the creation of a credit report?
This demonstrates that all information on your credit report, including how much money you now owe and whether you have any outstanding loans, is based on data provided by your creditors and credit card company.
#12. Our credit report can be obtained in what way?
Every year, each of the four Indian credit bureaus is required to provide a free credit score report to every person of our nation. Consumers should space out their inquiries in order to get one free credit report per quarter of the year. As a result, they will be entitled to get one free credit report.
In order to receive a free credit score report and regular updates on their credit ratings, consumers can also try contacting financial websites online.
#13. What will happen if your credit report has certain inaccuracies?
Any inaccuracy on the part of your lender or the credit bureau of India may have a negative impact on your credit score as well as your eligibility for future loans and credit card chances because credit reports comprise the credit information provided by lenders and credit card issuers.
Notify your lender and the appropriate credit bureau of India as soon as you see a mistake, an unusual transaction, or fraudulent activity on your credit report to make sure it is fixed. After the repair process, your credit report will immediately show an updated credit score.
To prevent your credit score from being badly impacted and to ensure that any inaccuracies or fraudulent activity are not detected, it is crucial that you regularly review your credit report. This will make it simpler to find any flaws or potential frauds that might be included in your report and immediately repair them.