Credit Score – Frequently Asked Questions

A good Credit Score can make or break your Loan or Credit Card application. We have answered a few frequently asked questions to help you acquire and maintain an excellent Credit Score.

In times when we have become increasingly dependent on credit, it’s important to have a good Credit Score as it is one of the most important deciding factors behind the approval of your Loan or Credit Card. The latest survey by TransUnion CIBIL indicates that nearly 74% of Indian consumers check their Credit Score at least twice a year in order to maintain a good credit history.

We have answered a few frequently asked questions to help you acquire and maintain an excellent Credit Score.

Check this: Check Your Credit Score On The Go!

What is a Credit Score?

The three-digit number in your credit report is your Credit Score. This number is based on your past credit transactions such as loan EMIs and Credit Card repayments. It ranges between 300 – 900 points. Generally, a score of 700 and above is considered good. The higher the score, the better your chances of getting approved.

Why should I check my score regularly?

Besides factors like your age, income etc., lenders check your Credit Score before granting a Loan or Credit Card. Checking your Credit Score regularly will ensure that your score doesn’t fall too low. If you start seeing a drop in your score, you can take the right steps to fix it.

Also, sometimes, there may be errors like spelling mistakes and wrong data entry. When you check your report and find any such mistakes, you can report it to the bureau. Once they are fixed, your score will improve.

Additional Reading: Maintain A Good Credit Score To Be Financially Independent

Does checking my Credit Score hurt my credit?   

Checking your score too often will not put a dent on your score. When you request your own score from a credit bureau, it goes as a soft enquiry. It has no impact on your Credit Score so you can check your score as often as you like.

It’s a good practice to check your score before submitting a Loan or Credit Card application. If you have a low score, you can take some time to improve it and then submit your application. This can increase the chances of your application approval.

Additional Reading: Rupeedo Stupido In ‘Credit Score Lows’

How often is my Credit Score updated?

There is no fixed time. It will change any time there is a hard enquiry from a bank or if you miss a loan or card repayment. Or it may improve due to your good repayment record.

How many Credit Bureaus are there?

There are mainly four Credit Bureaus in India – CIBIL, Equifax, Experian and Highmark. Your Credit Score will be around the same for all credit bureaus.

How much does it cost to check your Credit Score?

At BankBazaar, you can check your score for free as many times as you want. We don’t charge anything. Besides, checking your Credit Score only takes a few minutes. Why don’t you check your Experian Credit Score for FREE here?

What affects my Credit Score?

There are various factors including your repayment history, credit utilisation ratio, the age of portfolio, total accounts and hard credit enquiries that can affect your Credit Score.

Repayment History: Your repayment history tells banks whether you have paid your dues on time and in full in the past or not. Clearing your Credit Card and loan repayments on or before the due dates will have a positive impact on your score. Missed or overdue payments can lower your score.

Credit Utilisation Ratio: It is the outstanding balance on your Credit Card vs. the maximum limit. Generally, the utilisation ratio of below 30% is considered good. Therefore, it’s important to manage your expenses better as maxing out your Credit Card can lower your score.

Age of portfolio: This factor has a medium impact on your Credit Score. It is the average age of your credit accounts. The longer you hold a Credit Card or loan account, better it is for you.

Total accounts: It’s the total count of your Credit Cards and Loans. This must be on the higher side. A mix of secure and unsecured credit is good for your Credit Score. Credit Cards and Personal Loans are examples of unsecured credit, and Home Loans and Car Loans are examples of secure credit.

Check this: How to Get Your Dream Credit Score Of 900 Points

There you go! In case you are looking for a Loan or Credit Card, we have instant-approval offers exclusively for you. Check them out!