11 Things You Should Know About Credit Score

21 August, 2018

A credit score is a number that tells a financial institute like a bank or NBFC about your past credit behavior. Generally known as the CIBIL score, the credit score is one of the important parameters used by lenders to decide credit worthiness of an individual. If you have recently entered the workforce or have been working for a while but need a personal loan, here are the 11 things you should know about credit score.

1. Credit score is a number between 300 to 900 which is calculated based on your financial transactions and credit history.

2. The credit Score indicates your tendency to repay debt as it is based on timely settlements of past dues, e.g. personal or consumer loans, credit card dues etc.

3. If you have a score of -1, it means that you don’t have a credit history.

4. While it is generally known as CIBIL score, it is not the only company that provides a credit score in India. The other credit bureaus are Equifax, Experian and High Mark.

5. A financial institution can contact any of these agencies to check your credit worthiness when you apply for a personal loan online or offline.

6. The higher your credit score, the better your chances of getting a personal loan approval. A score above 750 is considered good by most lenders.

7. All financial institutes are required by law to share credit-related information with the credit rating bureaus. So, all these rating agencies will have similar records of your financial history. However, the credit score may vary slightly based on each bureau’s internal scoring mechanisms.

8. The bureaus allow access to your current credit rating upon payment of a small fee. These reports can be periodically refreshed to view updated information, albeit with additional payment to the bureau.

9. Missed loan EMI payments and credit card payments are the most common reasons behind low credit scores.

10. Low credit scores do not always mean that you won’t get a loan approval. Sometimes, the lenders may grant you loan with a low credit score, but with harsher repayment terms like shorter duration and higher interest rate on the principal amount.

11. If you think that there is a mistake in your credit report, you can always write to one of these bureaus for correction.

If you are looking for a personal loan and not getting one because of your low credit score, try applying for a loan with online P2P platforms like Monexo. They have their own credit rating mechanisms and offer quick personal loans at competitive interest rates and flexible EMI options. To know more about personal loans from Monexo, visit www.monexo.co/in