Free credit score

Planning to avail a new loan or credit card for your financial needs? Hold on and see if you have checked your credit standing. Checking free credit score is significant before applying for a loan or credit card as it helps to avoid application rejection at the last moment. Everyone should check his or her credit report often to get a brief about their credit management.

What is a credit score?

A credit score is a three-digit number ranging from 300 to 900, which reflects the level of creditworthiness of an individual or a company. Every time you apply for secured or unsecured loan, the lender checks your credit score to determine your credit standing. Hence, it is not a mere number, but a centre point to let the lenders decide whether to approve or reject the loan application.

In India, there are basically four credit bureaus licensed by the RBI – the Credit Information Bureau (India) Limited, Experian, Equifax, and CRIF Highmark. These credit bureaus gather information from the banks and financial institutions, based on which the credit report is generated. Credit report is nothing but a breakdown of a credit score consisting of detailed financial behaviour of an individual.

Credit score range :

  • 300 to 600 –Needs an immediate action to improve the score
  • 600 to 650 -Credit is offered at higher interest rates than usual
  • 650 to 700 -Fair enough to avail limited loan and credit offers
  • 700 to 800 -Banks and lending institutions approves the loan application without a doubt
  • Above 800 -This is an excellent score range and in fact, the applicant can negotiate for best deals

What affects your credit score?

While you check your free credit score, it is significant to first understand what factors leave an impact on your credit report.

Payment history – How regular you’re with your EMI and bills payments have a direct connection with the credit score. Any delay or outstanding payment and settled accounts can leave red flags on the report.

Age of loan accounts – An average age of loan accounts is considered to see how mature you’re at managing finances. The loan account maturity helps to crack down the future financial dealings.

Healthy credit mix Lenders are very much interested how good you are at managing different types of loan accounts. Therefore, it is advised to keep a healthy mix of credit with a balance of secured and unsecured loans.

Debt-to-income ratio – Though this factor is often overlooked by an individual, but not by the lenders and credit bureaus. Credit bureaus always consider the credit utilization ratio to generate a free credit score.

How to check a free credit score?

Civil Score : Well, in this digital era, checking a free credit report is no rocket science and it hardly takes a few minutes to get the report in hand. Just visit the website, sign in, and you’re good to go. In just three simple steps, you can check your credit score online and a detailed credit report to plan the finances ahead.

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