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Is Credit Score Advise worth it?


Is Credit Score Advise worth it?

  • By Saral Credit
  • September 21, 2022

Every bank/lender checks your credit score whenever you apply for a loan or any credit facility. Unfortunately, many of you fail to maintain a good credit score and can't get the loan for your needs. Credits core plays a significant role in the quick approval of your credit facility.

What is a Credit Score?

Credit Score is a three-digit number that represents the creditworthiness of the individual. A credit score differs for every individual derived from financial practices, ongoing loans, EMI payments, etc. Multiple credit bureaus calculate the credit score for every individual. In India, three RBI-authorized credit bureaus are Experian, Equifax, and CIBIL. CIBIL is the leading credit bureau that most banks and lenders consider.

The CIBIL score ranges between 300 and 900, where 900 is the best credit score and 300 is the worst. Anything above 750 is considered a good credit score; the individual above this count can quickly get any loan. It's important to note that your credit score will be 0 if your credit history is just 6 months old. Usually, it takes 18-36 months to build a good credit history.

Banks/lenders consider the credit score as the base to check the individual's creditworthiness before lending money or any credit facility. A credit score gives the basic information on whether the individual can repay a loan on time without delay.

Missing or skipping your loan payments always harms your credit score. All banks/lenders can check such information on your credit report whenever you apply for a credit facility.

Why Should You Consider Credit Score Advise?

Before applying for any credit card, car loan, personal loan, or housing loan, you should always check your credit report and ensure the report is free from any mistakes. Any sort of mistake in your credit report can create trouble getting quick loan approval. Banks/lenders check the credit score that can cause your loan rejection if they find any loopholes or discrepancies in your credit report.

Nowadays, numerous CIBIL score advisory agencies are available to help you get detailed information about your credit status. They understand your current financial status and give you a better insight into how to plan your future, eliminate your debts, and live a debt-free life.

CIBIL improvement agencies also help you the most if you have an overdue account that you cannot clear.

Now, if you have a bad credit score, it's essential to focus on tips that can help you improve your credit score and reach a reputable status. Below are tips to help you jumpstart your good credit score journey.

Set Reminder for Timely Repayments: The biggest mistake individuals make when taking a loan is missing out on their repayment date and hence mistakenly skipping the EMIs that add penalty and even put a mark on your credit report. With continuous skipping of your loan payment, your credit report will showcase the debt count and due amount that will harm your credit score and dispel you from getting any loan in the future.

So, it's better to set a reminder about the repayment date to keep you active and ensure your account has enough funds for the loan payment.

Retain Old Credit Facilities: Most individuals focus on closing the old credit account and retaining the new ones. This is a big mistake, as old credit facilities help build your credit score. A credit score is increased if you pay for any old loan account without delay. A credit score is built with lengthy credit history, which is only possible if you continue paying for the old loans. If needed, you can close the new ones but retain the old ones as is with timely payments.

Limit Your Debt-to-Income Ratio: The debt-to-income ratio is the percentage of income used to repay debts. Financial experts suggest limiting your debt-to-income ratio below 50 percent. It means you should never have an EMI of more than 50 percent of your monthly income.

Create a Plan & Monthly Budget: Creating a monthly budget is a good practice for everyone as it gives you better control of your money and keeps an eye on every penny you spend. You should always create a monthly budget in the initial days and follow it strictly. Remember, your budget must include the ongoing EMIs, needs, and wants. However, you shouldn't skip the saving part that will secure your future.

Check Your CIBIL Report Regularly: There are chances your credit report gets incorrect data that directly affect your credit score. Sometimes, you get your bad credit score information after getting rejection for a loan. Hence, checking your credit report regularly and checking for any mistakes/errors is always recommended.

For first-time readers, it is essential to know the crucial mistakes/errors you might find in your credit report. Below are the usual often encounterered errors that in a CIBIL report.

  • Identity errors
    • Mistakes in your identity information, such as name, address, contact details, etc.
    • Mixing your accounts with another person with the same or a similar name
  • Account errors
    • Open accounts reported as closed or vice versa
    • You are reported as the owner of the account when you are just an authorized user
    • Accounts that are reported as delinquent or late despite timely payments
    • Incorrect date of date opened, date of last payment, or date of first delinquency
  • Balance errors
    • Accounts listed with the wrong current balance
    • Accounts listed with a wrong credit limit
  • Duplication Errors
    • The same debt listed more than once, possibly under different names or creditors
    • Fraudulent accounts or transactions
    • Unknown accounts in your name
    • Unknown transactions in your name

Is Credit Score Advise Worth It?

The shortest answer to this question is YES. With CIBIL score improvement advise, you learn about different ways to help you maintain a good credit score and easily qualify for any credit facility you need in the future.

The credit score advise also gives you insight into your credit report and updates you about any mistakes/errors. Before it becomes a big problem, you can take adequate action and rectify the mistakes in your credit report.