90% of the people who take loans don’t understand how to read a credit or CIBIL report. You might be one of them, but don't worry; we have discussed every point so that you will have a basic understanding of reading the CIBIL report. Make sure you read this blog till the end.
Well, a credit report is a detailed record of your credit history. It includes information about your loans, credit cards, payment history, and outstanding balances. Lenders use it to see how well you manage debt and to decide if they should lend you money.
You can obtain a free credit report Here by following the below steps:
Visit the official website: Here
Contact us at support@eazybankloan.com just by writing hey, I want a free credit report.
Fill in your details such as name, date of birth, PAN card number, and email address.
Answer a few questions to verify your identity.
Download your credit report or have it emailed to you.
Tip: It's a good practice to review your credit report at least once a year to ensure all the information is accurate.
A credit report is divided into several sections, each providing specific information. Here’s a breakdown of what you’ll find:
This section contains your personal details such as:
Name
Date of Birth
PAN Card Number
Address
Phone Number
Important to Know: Ensure that all personal information is accurate. Incorrect details could lead to errors in your credit report.
This section provides a snapshot of your credit history, including:
Number of accounts (loans and credit cards)
Total credit limit
Total outstanding balance
Credit utilization ratio (percentage of credit used versus the total credit available)
Tip: A lower credit utilization ratio (preferably below 30%) is favorable as it shows responsible credit behavior.
Here’s where you’ll find detailed information about each of your credit accounts, including:
Type of account (credit card, personal loan, home loan, etc.)
Account number
Lender’s name
Credit limit or loan amount
Outstanding balance
Repayment history
Important to Know: Review your repayment history carefully. Any missed or late payments will be recorded here and can negatively impact your credit score.
This section shows all the times lenders have checked your credit when you applied for a loan or credit card. There are two types of inquiries:
Hard Inquiries: These are made by lenders when you apply for credit. Having many hard inquiries in a short time can lower your credit score.
Soft Inquiries: These are usually conducted by you or by companies for pre-approved offers. Soft inquiries do not impact your credit score.
Tip: Avoid applying for multiple loans or credit cards within a short time frame to prevent a drop in your credit score.
Your credit score is a three-digit number that summarizes your credit report. It ranges from 300 to 900, with a higher score (750 above) indicating better creditworthiness.
Breakdown of Credit Scores:
750-900: Excellent credit score. You’re likely to get loan approvals with favorable terms.
700-749: Good credit score. You’ll likely be approved for loans, but not necessarily with the best interest rates.
650-699: Fair credit score. You may face some challenges in getting loans or may receive higher interest rates.
600-649: Poor credit score. It will be difficult to get loans, and if you do, it will be at very high interest rates.
Below 600: Very poor credit score. Loan approvals are highly unlikely.
Important to Know: Regularly checking your credit score helps you spot and fix issues to improve it if needed.
This indicates whether you’ve missed any payments on your credit accounts. It’s crucial to understand the following terms:
Current: Your account is up-to-date with all payments.
30, 60, 90+ Days Past Due: This shows how late your payment is. The longer the delay, the more it negatively affects your credit score.
Important to Know: Missing a single payment can drop your credit score significantly, so always make payments on time.
This section shows public records like bankruptcies or tax liens. These can harm your credit score and stay on your report for several years.
Tip: If you notice any incorrect public records, report them to the credit bureau immediately for correction.
If you’ve settled a loan for less than the full amount owed, it will be noted here. While it may help you clear debt, it negatively impacts your credit score.
Important to Know: Opting for a loan settlement should be a last resort as it can lower your credit score by up to 100 points.
If you find any discrepancies or errors in your credit report, it’s important to take immediate action. Here’s how:
Identify the error: Check whether it’s an incorrect personal detail, a wrong account balance, or an unauthorized inquiry.
Gather supporting documents: Collect evidence such as bank statements, loan agreements, or credit card bills.
Submit a dispute: Contact the credit bureau that issued the report and provide details of the error along with supporting documents.
Follow up: Ensure that the bureau has rectified the error and issued an updated report.
Pay your bills on time: Your payment history has the most significant impact on your credit score. Set reminders or automate payments to ensure you never miss a due date.
Keep your credit utilization low: Aim to use less than 30% of your available credit limit.
Avoid multiple credit applications: Each hard inquiry can reduce your credit score by a few points, so be selective when applying for credit.
Review your credit report regularly: Look for errors or unauthorized activities and report them immediately.
Maintain a mix of credit: Having a combination of secured (like home loans) and unsecured credit (like credit cards) can positively influence your score.
| Section | Key Information |
|---|---|
| Personal Information | Name, Date of Birth, PAN, Address, Phone Number |
| Credit Summary | Number of accounts, Total credit limit, Outstanding balance, Credit utilization ratio. |
| Account Information | Type of account, Account number, Lender’s name, Credit limit, Outstanding balance, Repayment history. |
| Enquiries Information | Hard inquiries and Soft inquiries. |
| Credit Score Range | 750-900 (Excellent), 700-749 (Good), 650-699 (Fair), 600-649 (Poor), Below 600 (Very Poor). |
| Apply for the Credit Card | Current, 30/60/90+ Days Past Due. |
| Public Records | Bankruptcies, Tax liens. |
| Loan Settlements | Negative impact on credit score. |
| Error Correction Steps | Identify error, Gather documents, Submit dispute, Follow up. |
| Tips to Improve Credit | Pay on time, Keep utilization low, Avoid multiple applications, Review regularly, Maintain credit mix. |
Understanding and regularly checking your credit report is important for good financial health. It helps you monitor your credit activity, fix errors, and improve your credit score. By staying proactive, you ensure your credit report accurately reflects your financial behavior, which can lead to better loan approvals and terms.
Remember: Your credit report shows your financial habits. Keeping it clean will help your credit score and open up better financial opportunities.
You should check your credit report at least once a year or before applying for any significant loans or credit cards.
Yes, errors can be corrected by submitting a dispute to the credit bureau with supporting documents.
No, checking your own credit report is considered a soft inquiry and does not impact your credit score.
Negative items like late payments can stay on your credit report for up to seven years, while bankruptcies can remain for up to ten years.
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