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Check Your Free Experian Credit Score

  • How to Improve Credit Score

    Credit Score plays an important role when you apply for a loan or credit card. It is a 3 digit number that reveals the creditworthiness of an individual to banks and other financial institutions.

    Credit Score is calculated using your credit history, which contains information such as your payments history, number of loans or credit card used by you, etc. In India, there are 4 major Credit Information Companies, namely CIBIL, Experian, Equifax and Highmark.

    A high credit score increases your chances of getting a loan or credit card and a low score completely ruins it. Banks do not like to give loans or credit cards to people with a low score because they do not trust them with their money. Despite having a low score, if you get a card or loan, then your credit limit may be low or you might have to pay a very high rate of interest. To prevent this, you must improve your credit score.

    Ways to Improve/Repair Credit Score:

    There are different ways using which you can repair your credit score. Some of them are as follows:

    1. Check your Credit Report

      One of the important things that you must do to improve your score is check your credit report. Doing this will help you in identifying errors in your report. If you find mistakes in your report, you must get it rectified immediately. As the credit score is calculated based on the information mentioned in the credit report, it is very important for you to ensure that this report is free of errors.

    2. Pay outstanding bills

      If you have any outstanding credit card bills or loan, you must pay it off immediately to repair or improve your score a bit. Payment history is one of the factors that is taken into consideration while calculating the credit score. If you have a history of delayed payments, then your score will be low and vice-versa. It is a good idea to activate payment alerts or auto debit facility to ensure that you always pay your credit bills or EMIs on time. Also, avoid paying only the minimum amount due on your credit card always as it will increase the outstanding balance of your card. Try to pay the full bill to keep the outstanding amount low.

    3. Credit Utilization

      It is another major factor that is considered while calculating the credit score. The amount of credit that is available to you versus how much of it you are using shows your dependency on credit money. It is advisable that people keep their credit utilization below 30%. So, if you have multiple credit cards, keep a check on how much money you are using on credit. Also, try to find a credit card issuer who will accept multiple payments in a month.

    4. Do not remove old accounts from report

      Some people tend to remove old accounts or deactivated accounts or accounts with negative history from their credit report to make it look good. Some even try to get their old debts removed from their reports once they pay them. This may not be a very smart thing to do. Agreed that negative things are bad for the score, but they are automatically removed from the credit report after a period of time. Getting old accounts removed may harm your score a lot as they may have a good repayment history. Also, if you have paid your debts, then you should keep them in your report as they will improve your score and also show your creditworthiness.

    5. Plan your credit

      Many people whose scores fall drastically are ones who do not plan their finances well. If you apply for too many credit cards just to increase your credit limit, but are unable to pay the bills off on time of all of them, then you will be left with a huge outstanding balance and history of delayed payments that will decrease your score by a lot. Also, applying for unplanned loans can leave you in a very bad financial state, if you are not able to repay them. Thus, it is important to plan credit and apply for a credit card/loan only if it is absolutely required and when you are sure that you will be able to repay the amount you borrow.

      Credit score cannot be repaired in a day or two. It requires time, patience and planning. Once your credit score improves, try to not make any mistakes that will harm it. If you do not have a credit score at all, then try to build it by applying for a regular or secured credit card.

    6. Top 10 things to know about your Credit Score

      Once indebted, you are under close watch by financial institutions. No transaction made by you in the credit market will go unnoticed, and the same is recorded and maintained in your Credit Score. The scores may range anywhere from 300 – 900, 300 meaning you have an appalling score and 900 meaning that you’re every lender’s dream customer.

      Although simple to comprehend, there are a lot of myths revolving around it. Here are 10 facts regarding Credit Scores.

      • Your Credit Score has nothing to do with your income, savings or investments. It is simply your debt activities and credit history, all summed up into a number that can usually articulate whether you’re a good debtor or not.
      • Checking your Credit Score does not affect the score itself. So, don’t worry about the score declining, check your Credit Score here.
      • Although defaulting your payments are reflected in your Credit Score, no data will be published on public forums. Only companies enquiring about a certain individual will receive the score.
      • Closing an active or inactive credit card will reflect in your Credit Score. It may either decline or incline but the reason for the change in the score will not be mentioned.
      • Your Credit Report can’t be edited or altered. The score will be updated as and when you perform a financial activity. From closing an account, defaulting on your payments, repayment, or any other activity, your score will be reflected accordingly. But, no alterations can be made on your report.
      • Credit scores are only the first impression of you to a lender and not the sole dictator of your loan approval. Different institutions and lenders have different screening processes to approve a particular loan.
      • As opposed to the common myth, you cannot apply for a credit score. If you’ve had a loan account, a credit card or have applied for a loan, your credit score will be available to credit companies.
      • Payments defaulted more than 3 years ago will not be taken into consideration while determining your Credit score. So you don’t have to worry about the payments you’ve defaulted on several years ago.
      • Taking too much credit can be detrimental to your credit score. Even though you may make your payments on time, an excessive credit will cause damage on your score.
      • Your credit utilization ratio too affects your credit score. The closer you come to your maximum limit on your card, the more likely you are to cause damage to your score.

      Why to Manage Credit Score and Credit Reports

      Do you think a good Credit Score is essential only for obtaining a banking product? Not surprisingly, it is equally important for less perceptible requirements such as getting an employment offer and even renting a vehicle. Many people are aware of the concept of credit rating system. A credit score is basically a three-digit number that assesses how likely you shall be to repay a mortgage. It utilises data from credit reports to comprehend the risk of bad debts. A credit report is a detailed description of your credit history. There are few more companies in Indian which do the same task- CIBIL TransUnion, Equifax, Experian and High Mark.

      Why Credit Management?

      • A power credit history will keep you well-rated to be able to suffice the future banking requirements at a lower cost.
      • You will be picked up by premier financial institution for a better banking business.
      • It keeps you financially reputed throughout the banking business.

      Ideas to Establish Credit

      • Pay in time.
      • Apply for credit intelligently.
      • Review Credit Reports at regular intervals.
      • Maintain a long-run credit and bank account history.
      • Manage multiple mortgages wisely.

      Breakup of Factors Influencing Credit Score According to Experts

      • Average length of credit history -15%
      • New credits - 10%
      • Multiple accounts owned - 10%
      • Loan quantity- 30%
      • Payment history - 35%

      Know the Importance your Free Credit Score

      An excellent credit score enhances your chances of being pondered for a mortgage, especially for a home loan. You are more likely to get lower interest rates on mortgages and may negotiate a lower insurance rate. The current home mortgages can be refinanced to a lower interest rate. Bankers may offer a lower processing fee and a flexible repayment option.

      Factors Impacting your Credibility Positively

      • Periodic EMI payments
      • Managing financial aspects properly
      • Using credit cards fairly
      • Ensuring the correctness of Credit Reports

      Did you know?

      • Many factors influence a credit score. It is interesting to notice that the category of credit you currently have, for instance, vehicle loans, education loans or personal loans, have an impact.
      • People tend to consume the overall credit limit allowed for a credit card. But, the ideal credit utilisation ratio should not exceed 30-35%. If exceeds, it may hurt your credibility.
      • Carrying dues from month to month may ease your obligation. It is more likely to bring down the rating.
      • Do not settle a loan for less than the actual outstanding balance to keep your rating unaffected.

      Who will use my Credit Score?

      • Lenders to determine whether or not to give you a mortgage
      • Insurance agents to decide the premium to be offered to you
      • Employers to offer you a highly responsible position
      • Utility entities to decide whether or not collect deposit
      • Landlords to determine whether or not to rent a property

      These Two Things Hurt Your Credit Score the Most

      One of the most useful features of a credit card is the convenience of paying as well as getting the security. Thanks to these two factors, we have been witnessing a massive growth of credit cards. However, even though credit cards come with the convenience of buy now pay later, you have to make sure to be particular the repayments. A bad repayment history takes a toll on your credit score in a big way. Let’s understand how is your credit score calculated:

        • 35% - Payment History

        • 30% - Credit Utilisation

        • 15% - Age of Credit History

        • 10% - Type of Credit

        • 10% - Credit Inquiries

      All the aforementioned factors affect your credit score but the payment history and credit utilisation hamper your credit score the most. Let us now understand how credit cards impact these two factors.

      • Payment History
      • The chances of missing out on credit card payment are usually high and therefore you should be extra careful and remember the due dates. If you are not able to keep up with the payment due dates, it is better to come up with a simple foolproof way to avoid delay. You can either give standing instructions to your bank to pay off the bill from your savings account on a particular date. If you miss the due date or pay only the minimum due, your balance will accumulate interest. Any subsequent purchases on your credit card will also accumulate interest from the date of purchase. You also lose out on your interest-free period. Late payment of non-payment of bills hampers your credit score and brings it down.

      • Credit Utilisation
      • You should first learn how credit utilisation is calculated. Majority people are not aware that the higher your credit utilisation ratio, the larger effect it has on your credit score. As per experts, you should use only 20-30% of your credit limit. If you constantly spend a high percentage of your credit limit, say 60-80%, your credit utilisation ratio takes a hit. It’s important for you to keep the ratio low as it enhances your credit score. One way to tackle high credit utilisation ratios is to use multiple cards. As you already know that the 30% of your credit score comprises your credit utilisation ratio, you should be extra careful while using your credit card and always keep an eye on the credit limit.

      It must be noted that improving your credit score take time and patience and it cannot happen overnight. You have to follow certain discipline and work towards your financial goals to achieve the desired credit score.

      Who has access to your Credit Reports?

      Although not many people can access your credit report, a few individuals and institutions who legitimately requires it may have access to it. If a company has a genuine business requirement with you, it is safe to assume that they have access to your credit report and score. Here’s a list of some of the institutions and individuals that have access to your credit report.

      Banks – Quite naturally, banks can gain access to your Credit Report to gauge your credit worthiness. You don’t necessarily have to have a credit card for banks to have access to it. Your credit worthiness may be examined if you’re applying for a loan or even opting for an overdraft facility as this is considered to be a line of credit as well.

      Creditors – Anyone willing to loan you money will have to determine your credit worthiness before they put their faith in you. Credit card issuers and mortgage lenders are amongst a few that fall in this category. Determining your credit worthiness helps the creditor gauge if you’re capable of repaying the loan and helps the creditor determine the terms and conditions of the same. Generally, the better your credit score, the more likely you are to get a loan approved and attain favourable terms when it comes to repayment and interest rates.

      Insurance Companies – Statistically, it shows that individuals with poor Credit Score are more likely to file a claim. Insurance companies often measure your credit worthiness to determine how much they need to charge you for a new policy.

      Employers – Several employers now use credit reports to judge an employer’s honesty and integrity when it comes to finance. It can also be used to assess the risk of bribery pertaining to an employee as people with a lot of debt are more susceptible to bribery. In some cases, the reports can be a decisive factor when it comes to promotions and demotions.

      Government Agencies – Government agencies who have a legitimate requirement to pull up your credit score may do so. In the event that you’re applying for government benefits, court order, conducting business with the government, or any such instance, the government may pull out a report to understand your financial standing.

      News About Credit Score

      • UK-based Fintech Startup ClearScore All Set to Offer Credit Scores in India

        ClearScore, a UK-based fintech startup is foraying into the Indian markets. In order to offer credit scores for Indians, the startup has teamed up with Experian, one of the popular credit bureaus in India. The credit scores from ClearScore will be available for free for Indians as the startup wants to increase the awareness level among Indians about the importance of credit. ClearScore is foraying in India after its entry in South Africa in 2017. Justin Basini, founder of ClearScore stated that he has invested around 3.5 million pounds in the Indian operations and is eyeing to pump in tens of millions of pounds over the next few years. Founded in 2014, the startup has opened an office in Mumbai and has appointed Hrushikesh Mehta as its India head. The Indian team currently has 25 members. The ClearScore Android app which is available on the Google Play Store will provide details of the credit score and also offer alerts about changes in the score and provide details about how consumers can improve the score.

        23 August 2018

      • UAP Insurance Bags High Credit Score

        UAP Insurance has received a high credit rating for its ‘insurance claim payment ability’. The ratings were given out by Global Credit Ratings (GCR).

        UAP has bagged an ‘AA - (KE) rating. The reputed agency that is based out of Johannesburg, is known for its impressive track record. The Insurance company has received a ‘stable outlook’. Gaining recognition for its brand value and competitive positioning in the market, UAP has made a name for itself as one of the stable franchises in an industry that has been deemed highly competitive.

        The provider is known to have a moderate to strong liquidity level and the credit rating agency expects the firm to maintain this stand in the days to come.

        27 July 2018

      • Smart Ways to Evaluate your Credit Score

        A credit score is a numeric representation of your creditworthiness. It is calculated by considering your credit history and repayment behaviour. A healthy credit score gives you a better chance to get quicker approval for loans, lower interest rates, higher credit limit on credit cards and so on. Your credit score is present in you credit report that has all the records of your loans and payments. The Reserve Bank of India (RBI) has made it mandatory for all the credit bureaus in India to offer one free credit score to its consumers in a calendar year. A credit score of 750 and above is considered by generally considered as ideal by banks and NBFC. Once you get to know your credit score and if it is less than 750, you can evaluate it to know which are the areas you need to work on in order to improve it.

        Here are some of the ways to evaluate your credit score

          Look out for defaulted payments: Firstly, it is extremely important to pay all your monthly bills on time. Check if you have not paid utility bills or missed a loan Equated Monthly Installments (EMI). Your repayment behaviour is one of the most important factors that can affect your credit score and bring it down. Hence, make sure avoid delays in making monthly payments of your bills as you may become a defaulter.

          Check if you have a mixed type of credit: It is important to have a balanced credit. This means, you should have a mix of secured and unsecured credit to maintain a healthy credit score. If you have a mixed credit, it suggests that you are capable to handle different credits efficiently. A mixed credit can be a home loan which is a secured and a credit card which is unsecured credit. Having a balance of both the types of credit will help you increase your credit score.

          Did you apply for multiple credit cards? : A credit hungry behaviour is not good for your credit score. Make sure that you don’t encourage hard enquiries from banks as too many queries negatively impacts your credit score. Also, asking for multiple credit cards also suggests that you can taking credit that you may not be able to handle. Hence, choose cards according to your need and then apply to just a couple of them.

          Have you checked your credit report recently?: It is important to do periodic checks of your credit reports as there might be errors in them. If you check you credit score from time-to-time, you can spot the errors and rectify them by raising a dispute with that particular credit bureau.

        Keep all the aforementioned points in mind to maintain a healthy credit score.

        12 July 2018

      • Here are top rules that will help you stay away from debt traps

        A credit card comes in handy in various emergency situations. Moreover, it offers several benefits and discounts to the card holder. However, you should be careful and when it comes to using the credit card as there is a high possibility you will over use it. Here are some easy steps that will help you keep aways debts.

          • Do not opt for paying minimum amount due: Minimum amount due is the amount a credit card holder pays to avoid late fee and keep the account active. It is not ideal to pay minimum amount due as you end up paying interest for the credit. Paying minimum dues once a while in a month where expenses might have exceeded is okay, but it should not become a recurring habit.

          • Do not default on your payments: It is extremely important to pay monthly credit card bill on time. Late payments will have a negative impact on your CIBIL score and bring it down. Moreover, you will also have to bear the late payment fees.

          • Maintain credit utilization ratio: It is important to maintain a healthy credit utilisation ratio. This essentially means, until your credit score reaches 750, make sure to not spend over 50% of your credit card limit.

          • Don’t possess multiple credit card: Make sure you don’t have more multiple credit cards as it will become difficult for you to keep a tab on all the expenses. There is a high possibility that you might forget to pay off the bills if you have more than one or two credit cards. Higher the number of credit cards, higher is the risk of delaying the payment.

        23 May 2018

      • 5 Reasons You Should Pay Your Credit Card Bill Before the Due Date

        Making early payments of your credit card bill has several benefits for the cardholder. Here are 5 reasons you should pay your credit card bill before the due date:

        1. Free your credit limit: An early payment of credit card bill will help you make additional credit card purchases as you will have more credit with you.
        2. Improve your credit score: Paying off dues early shows a responsible financial behavior and will in turn improve your financial status.
        3. Stay away from interest charges: It is better to clear your credit dues if you have enough funds. Make sure to stick to the due date and avoid accumulating interest for late payment.
        4. Helps in budget management: Advance payment of credit card dues will help you in planning your budget. It gives you a better idea of your spending.
        5. Lower risk of late payment: Finally, it is better to not wait till your payment due date as there is a high risk of missing the deadline and facing late payment fees.

        One of the ways to stay on top of your credit card payment game, is to give your bank a standing instruction to pay of the bill directly from your account on a certain date.

        1 March 2018

      • Maintain Your Credit Score to Avail Loan Easily

        Credit Score is the reflection of your credit worthiness which plays a crucial role loan in getting a loan approved. While some unknowingly reduce their credit score, some due to unavoidable conditions bring down the credit score. With the drop in the credit score, getting approvals on loan gets tougher.

        At regular intervals, you should track your credit score from the credit bureaus present across the nation. The free credit report generated by the credit agencies can be handy in figuring out your current credit score. Besides, you can also check your credit score by paying monthly subscription. Paying off all the dues on-time is of foremost importance as it increases credit score drastically. Defaults on loan payments drops the credit score immensely which later may impact your loan process. Pay all the credit card bills completely rather than partial payments as it may even affect your credit score.

        If you are too cautious and are not exposed to credit at all, credit score may also drop. In such scenario, opt for a credit product like gold or fixed deposit that can enhance your credit score. Pay the amounts on-time to increase your credit score. 

        29 December 2017

      • Avail a Credit Card without the Corporate Job

        Credit cards galore. However, availing one is not easy as it sounds. While owning a credit card is easy for salaried individuals, for self-employed individuals availing one can be tedious. Banks, therefore, impose higher interest rates and follow strict guidelines before allotting a credit card to them.

        To reap a credit card, an unemployed individual can abide by any of these facts. These are: applying for a secured credit card against the fixed deposit, using third party portals present online, enrolling for supplementary credit cards, showcasing assets, submitting credit score if there is any, and approaching the saving account bank with good credit history. Individuals can also refer a person or family member, who holds a credit card with good credit score to get a credit card without much hassles.

        There is huge demand of credit card in the market as it offers slew of benefits such as emergency cash, EMI options, loans against cash, international spending options and many more, and so everyone desire to have one. Moreover, for a shopping spree, credit cards can turn rewarding too as it offers reward points. Using the reward points, the credit card holder can book an air ticket or a hotel room, at minimal charges. The users who pays all the credit card bills on time, building a goodCredit Score becomes easy for them.

        28 November 2017

      • RBI’s Initiative to Track Credit Quality

        Mounting bad loans have turned to be the worry for many of the Indian lenders today. When the economy faced three year’s economic slowdown, bad loans prohibited many of the banks to aid in credit growth.  In light, to that the reserve bank of India (RBI) has constituted a ten-member task force to build a public database of credit information. The team will also include expertise from European central bank, World Bank and many other monetary bodies. The enthusiast team will analyze the recent availability of credit information across the nation. The team will then try to fill the void with public credit registry. Not only that, the task force will also scrutinize international practices on public credit registries. This will help them to decide the scope and finalize the structure of information system. Based on all the gathered report, the team will develop a real-time PCR that is transparent and comprehensive. To figure out, the huge credit exposures of lender, the task force has already created a central repository of information, which has brief statistical return database with detailed information on the efficiency of the credit. The first report from the panel will be submitted on 4 April 2018. So all together, a credit registrary will enhance the ease of doing business, heighten the efficiency of credit market, improve financial inclusion and control delinquencies.

        23 November 2017

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