WHY DO I NEED TO GET MY CREDIT REPORT?

Last updated on March 23, 2018

A credit report is a report that helps to build a person’s credit score. A credit score is made, based on the level analysis of the person’s credit data, for judging his or her credit eligibility. Credit scores are mainly structured based on the data of credit report made by credit bureaus. Organizations that offer loan of money, such as banks, credit card companies and others, use this credit score. Credit score becomes the scale of an applier’s ethics of returning the loan properly. By analyzing the credit score banks and other lenders try to avoid the potential risk of losing the money in a bad debt. So to tell the story in the other way round without this you can’t get a loan. That is why any person should ask himself or herself the question ‘How to get my credit report?’

Credit scores or reports have wider application than just in banks. Companies like mobile phone providers, insurance companies, landlords, governmental departments and many more authorities use credit reports. Even digital financing groups such as online lenders are also using credit scores to judge applier’s authenticity. Credit scoring is considered to be the same as data mining, as both of them apply the same methods. These methods may use thousands of aspects for judgment, but they have similarities among them.

Credit score information

The process of making a credit report in India is performed by 4 credit information companies that are licensed by the Reserve Bank of India. The core and the oldest organization named as the Credit Information Bureau India Limited or in short CIBIL has started operating in January of 2001. The other 3 companies viz. Experian, Equifax, and Highmark were authorized by Reserve Bank of India by 2010. These 4 companies are the sole legitimate organizations authorized in India that operate the credit information of people. Each and every one of these 4 companies has their own credit scoring policy, although being the oldest company CIBIL’s credit score has more popularity than the other three.

A CIBIL credit score is a 3 digit score which shows the gist of a person’s credit history and ratings. The scale of the CIBIL credit score ranges from 300 to 900— 300 being the lowest and obviously 900 being the highest score, which signifies the best candidature. Those persons who do not have any credit history will start with a score of -1. The individuals with a credit history of fewer than six months will be given a score of 0. Normally, it takes a credit history of between 18 and 36 months or even more for obtaining the best score of 900 in CIBIL credit score.

Now the question arises, how much time it takes for the report to be prepared. The report is prepared based on the history of an individual. And it keeps changing at the organization. When the applier asked for the same can get his or her credit report within 15 days of the application. It may take more time if the authority needs to verify the applicants’ identity.

Thus, now you know the benefits of checking your credit score.