Why You Should Check Your Credit Report?

A credit report is a summary of your credit activities and repayments behaviour. It is prepared by the credit bureaus in the country and comprises credit score, detailed credit information related to your current as well as past credit accounts, loans, payment history, and closed accounts. Moreover, the credit report also includes personal information, details of your credit cards, credit limit, and credit inquiries. Lenders like banks and non-banking finance companies use a credit report to understand the creditworthiness of loan as well as credit card applicants.

Here are some of the reasons to should check your credit report:

• At the time of applying for a loan: It is better to know what your current financial status is before you apply for any type of loan (home and auto). Checking your credit report will give you an idea of whether the lender will approve your loan. A higher credit score gives you a better chance of getting quick approval for a loan. It must be noted that each credit inquiry lowers your credit score, therefore you should limit the number of times lenders check your credit.
• Checking your credit report after a long time: You should check your credit report periodically to understand what are the areas that you need to work on. It is a good habit to check your report at least 2-3 times a year as there could be errors in it.
• Get your free credit reports: Since 2017, the Reserve Bank of India (RBI) has made it mandatory for all the credit bureaus in the country to offer 1 credit report to consumers once in a calendar year. As there are four credit bureaus in the country, you can request 4 credit reports from each of the credit bureaus.
• Error in personal information: Your credit report can have errors related to your personal information like name, address, mobile number, among others. If you come across any errors, you can raise a dispute to the respective credit bureau.
• Check for an identity theft: You can also be a victim of fraud which can result in a drop in your credit score. If you come across accounts that are not yours, you should get it fixed at the earliest.
• Incorrect credit account information Your credit report can also have incorrect records of your credit accounts or duplication of the same loan or credit card account. In some cases, your credit accounts can get mixed with someone else’s details and hampers our credit score.
• Unexpected drop in your credit score A good time to check your credit report is when you witness a sudden drop in your credit score. This might be due to fraudulent activity or some error in your credit report.
• At the time of an upcoming big expense Checking your credit report comes in handy when you are planning to buy expensive items like electronic devices or planning international travel. This gives you an idea of your present credit status.

FAQs On Check Your Credit Report

1. Can I get a free copy of my credit report?

Yes. As per the RBI mandate, you are entitled to receive one free credit report from a credit bureau in one calendar year.

2. How much does a credit report cost?

The price of a credit report is different for each credit bureaus. You can get the exact cost of the report by visiting the credit bureau official website.

3. Does my credit report contain any other information?

Yes. Your credit report has your personal information like name, address, mobile number, email address, employer details and PAN number.

4. Can I get errors fixed in my credit report?

Yes. If you come across any errors in your credit report in terms of personal or credit account information, you can raise a dispute with the respective credit bureaus and get the errors fixed at the earliest.

5. How long does negative information stay on my Credit Report?

If you have negative information in your credit report, it gets cleared off after 7 years. However, in case you have been through bankruptcy, the negative information remains on your report for 10 years. In the case of revolving accounts like credit cards, your positive history will stay on your report for as long as the account is active.