7 Things You Won’t Find In Your Credit Report

By BankBazaar | November 23, 2018

Here’s a look at seven financial areas that are NOT covered in your credit report. Let’s clear the clutter!

7 Things You Won’t Find In Your Credit Report

Your credit report a.k.a. your credit information report (CIR) is an important document that gives lenders an insight into your borrowing capacity and creditworthiness. Banks and financial institutions place a lot of weight on a person’s Credit Score when evaluating their application for a loan or Credit Card.

Your credit report has a whole lot of data in it for lenders to be able to judge you for your creditworthiness. It’s an information gold mine and one can conjecture much about your financial behaviour and practices just by studying your report.

It’s because of the power your credit report wields on how much credit you can borrow, we insist that you check your score regularly. It will not only help you stay on top of your financial game but also help you spot errors that might be fatal for your score.

For all its importance, your credit report is not an exhaustive list of everything money-related. There’s a fair amount of financial data that will not find its way onto your credit report.

In this article, we’ll look at seven financial areas that are NOT covered in your credit report. This will help you understand what financial behaviours do and do not impact your Credit Score. Let’s clear the clutter!

  • Savings and investment data

Your credit report will not feature any information pertaining to any of your savings or investment accounts. It does not report transactions conducted through these accounts and they do not affect your Credit Score.

This includes information on your Fixed Deposit accounts, current accounts, and trading accounts. While your savings and income sources are representative of your financial position, your Credit Score is only concerned with your credit status and history.

  • Credit approval status and analysis

The findings in your report determine your Credit Score. But suggestions on how you can improve your score will not be present in the report. It’s up to the bank or financial institution to decide whether a score is adequate or not. The report will not inform an individual about the status of his/her loan or Credit Card application.

The credit report is as the name suggests – a report which only presents documented information. You can draw relevant inferences and analyses based on the information in the report. For e.g. you may have a high Credit Score, but a bank may identify payment defaults on a prior loan in your credit report and decide to reject your loan based on this.

  • How to improve your Credit Score

Your report will contain data on delayed payments or defaults, but it won’t quantify the effect of these instances on your Credit Score. Your score is a summation of everything in your report. It will not provide specific measures or suggestions to improve your score based on recorded data.

For example, your report will not provide guidance on when to apply for a loan in case some of your previous applications have been rejected. Your report will also not tell you by how many points or how quickly your score will improve if you reduce the number of Credit Cards you own or close an outstanding loan.

  • Your credit utilisation ratio

This is the ratio between your credit limit and credit usage. Your report will not indicate this ratio. But banks can calculate this based on the information provided in your credit report.

Overutilisation and underutilisation of credit both affect your Credit Score. But your credit reports will not mention the degree by which you underutilise or over utilise credit. Banks generally look for a credit utilisation ratio of under 30%.

Additional Reading: Going For A Loan? 5 Facts You Must Know About Your Credit Score

  • Reason for settlements

Your credit report will show settlements but not the reasons for those settlements. In many cases, genuine circumstances may have prompted you to settle an account e.g. you could not make timely payments due to a medical emergency or your card was used fraudulently.

However, these instances can only be explained to enquiring institutions once they have identified settlements in your report and raised this as an impediment to your credit approval process.

  • Defaulters list

There is no list of defaulters and credit rating agencies definitely do not maintain such a list. Hence, your report will never mention you as a defaulter. It is a misconception among many that lenders can access a credit record, which blacklists you as a defaulter on past credit. But defaults by you, if any, will be mentioned in your report. Your credit report will record defaults which factor into your score, but this is not separately highlighted or recorded as part of a specific list.

Additional Reading: Busting Myths Around Factors Affecting Your Credit Score

  • Monthly payment history beyond 3 years

Monthly payments for up to three years are recorded in the report. Your latest credit report will not show payments prior to this period. It is recommended you check your report about 3-4 times a year to review your payment history and identify any discrepancies at the earliest to avoid a bad score.

Your report can be rectified only if the relevant member institution asks the credit bureaus for a discrepancy to be corrected. This process can take time, which makes it all the more advisable to keep a tab on your records.

Credit Scores are becoming increasingly prominent in the financial system. Presently, banks, Credit Card issuers and other financial institutions extending credit are the primary consumers of Credit Scores. It is likely that insurance companies and telecom companies may soon join the fray.

Additional Reading: 4 Terrific Ways In Which A Good Credit Score Can Help You Save Money

Credit Scores have become an indispensable part of people’s lives. It is, therefore, essential that all individuals make their credit report review process a part of their financial planning. This will help them avail credit easily.

We are offering our customers the benefit of checking their Experian Credit Score for free. Yes, absolutely free! You can even check your score as many times as you want. No limits!

So don’t delay. Check out your Credit Score now in a few clicks.

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