What is Credit Score?

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A credit score is a numerical reflection of an individual’s creditworthiness, aiding in the assessment of their capacity to repay borrowed funds. Typically ranging from 300 to 900, a higher score indicates a more reliable applicant.

When you apply for a credit card or a loan from a bank or an NBFC, having a higher credit score may entitle you to receive further benefits such as a higher loan amount, lower interest rate and your choice of tenure to repay the loan.

The Reserve Bank of India has licensed four credit information companies in India to calculate credit scores namely, Credit Information Bureau (India) Limited (CIBIL), CRIF Highmark, Experian, and Equifax.

You can check your credit score for free once a year from any of the three major credit bureaus. You can check your credit score for free from BankBazaar Website. Checking your credit score does not affect your score, so it’s a good idea to check it regularly to make sure there are no errors.

Features of RBI’s New Credit Reporting Rules

The Reserve Bank of India (RBI) has instructed lenders to report credit information to Credit Information Companies (CICs) like CIBIL every two weeks. Mentioned below in bullet points are the features of the new credit reporting rules:

Fortnightly Reporting: RBI mandates lenders to report credit information to Credit Information Companies (CICs) like CIBIL every two weeks.
Enhanced Timeliness: The new reporting schedule aims to ensure that CICs provide more up-to-date credit information, benefiting both borrowers and lenders.
Faster Updates for Borrowers: Borrowers will experience quicker updates to their credit information, especially following loan repayments.
Improved Risk Assessment for Lenders: Lenders will gain a more accurate understanding of borrowers’ risk profiles, helping to reduce the chances of over-leveraging.
Current Reporting Practices: Previously, lenders were required to report credit information on a monthly basis or at intervals agreed upon with CICs.
Increased Accuracy: The shift to bi-weekly reporting is expected to enhance the accuracy and timeliness of credit information.
Informed Lending Decisions: More frequent data updates will enable CICs to provide current information, supporting better-informed lending decisions by credit grantors.
Faster Dispute Resolution: The updated reporting frequency will also help in resolving consumer disputes more quickly by providing the latest data in credit records.

Here are the steps to follow for a credit score check within 2 minutes.

Check your Credit Score

Steps To Get Your Free Credit Score

Visit credit score Page
Enter your first and last name.
Add your mobile number and e-mail ID.
An OTP will be sent to your mobile number for verification.
The next step would be to verify your age.
Your credit score and your report will be then displayed on the screen.

Credit Score Range and What It Means?

A credit score in India ranges between 300-900. You should always take measures to bring your credit score closer to 900. A higher credit score increases your chances of getting a good deal on personal loan as well as credit cards.Free Credit Score

CIBIL Score Range: CIBIL scores can range from 300 to 900, with 900 indicating highest creditworthiness. The table below highlights the various CIBIL score ranges:

CIBIL Score Range	Meaning
NA/NH	This means it is either “not applicable” or “no history”. If you have not used a credit card or have never taken a loan, you will have no credit history.
350 – 549	A CIBIL score in this range is considered as a bad CIBIL score. It means you have been late in paying credit card bills or EMIs for loans. With a CIBIL score in this range, it will be difficult for you to get a loan or a credit card as you are at a high-risk of turning into a defaulter.
550 – 649	A CIBIL score in this range is considered as fair. It suggests you have been struggling to pay the dues on time. The interest rates on the loan could also be higher.
650 – 749	If your CIBIL score is in this range, you are on the right path. You should continue displaying good credit behaviour and increase your score further.Lenders will consider your credit application and offer you a loan. However, you may still not have the negotiation power to get the best deal on the rate of interest for loan.
750 – 900	This is an excellent CIBIL score. It suggests you have been regular with credit payments and have an impressive payment history.Banks will offer you loans and credit cards as well considering you are at the lowest risk of turning into a defaulter.

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Experian Score Range: Experian credit scores range between 300 and 850. The different Experian score ranges are mentioned in the table below:

Experian Score Range	Meaning
NA/NH	This indicates that you have no credit history.
350 – 549	This score range implies that you have a poor track record of payment defaults, financial management, and credit utilisation. Creditors will be hesitant to extend credit to you.
550 – 649	This credit score range is regarded as fair. It indicates that you have a history of payment defaults and unsecured loans.Lenders will view you as a risk because you could potentially default.
650 – 749	An Experian score of 650 – 749 is considered good and demonstrates financially responsible choices and timely repayments. Lenders will view you as a low-risk borrower.
750 – 799	A credit score in this range proves that you have an excellent history of financial management, making on-time payments, and avoiding defaults. Thus, lenders will extend credit to you.
800 – 850	This Experian score range is the highest. It refers to a person with a credit history that is almost perfect. Financial institutions are inclined to provide you loans and credit cards because you have a low risk of defaulting.

Credit Score Calculation

The RBI has granted licenses to four credit information companies in India that are responsible for computing the credit scores of individuals. These credit information companies are TransUnion CIBIL Limited, Experian, CRIF High Mark, and Equifax.

When you make a transaction—the one that is relevant to determine your score—banks send details about it to all four credit bureaus. Essentially, banks keep Credit Information Companies up to date about your monetary habits.

If a bank needs to check the credit score online, they can approach any one of the bureaus. It doesn’t matter which one because all will have the same score for you– all four are equally authoritative and on par with each other.

After receiving information from the bank, credit bureaus get down to the task of collecting more information about your financial habits from other banks and financial institutions. The credit bureaus then process this information to formulate what is called a Credit Report.

Why is BankBazaar Giving me my Credit Score for Free?

BankBazaar feels that you should always be in complete command of your personal finances. In order to help you with this goal, we have made provisions for you to check your credit score for free. Knowing your Credit Score before applying for a personal loan can help greatly.

If you have a good score, you can rest assured that your loan or Credit Card application will be processed without any hassle. You can even leverage a good score to ask your lender bank for better rates of interest and additional benefits.

On the other hand, seeking credit with a poor score will further lower your score. Let’s not even imagine getting approval for a credit line. Hence, check your Credit Score online before you apply for a financial product. Work up the score if it’s not in the acceptable range

.Check your Credit Score

Why Should I check my Credit Score?

It is very important that you keep a close eye on your Credit Score. It is the best way to gauge your chances to get a line of credit.

Another reason why you should track your credit score is to know if it dips, or if an error has been made by credit agencies while calculating your score. This will help you make timely amends.

Why is BankBazaar Giving me my Credit Score for Free?

BankBazaar feels that you should always be in complete command of your personal finances. In order to help you with this goal, we have made provisions for you to check your credit score for free. Knowing your Credit Score before applying for a personal loan can help greatly.

TIP: Credit agencies review and renew your score every few months. If you have a poor Credit Score, start managing your money wisely and pay your dues on time for a few months. Credit agencies will reward you by boosting your score.

Does my Credit Score Get Impacted if I Enquire About it?

It depends on the kind of enquiry being made. There are two types of enquiries, hard and soft enquiry. Hard enquiries send your Credit Score down by a few points, while soft enquiries do not impact your Credit Score.

An enquiry made by an individual is called a soft enquiry. BankBazaar will make a soft enquiry on your behalf when getting your Credit Score from Experian. Hence, this will not impact your Credit Score in any manner. Moreover, you can get your credit score for free.

A hard enquiry is when a financial institution checks your Credit Score to take a decision on your credit application. Every time you apply for a loan or a Credit Card, the lending institution checks your score. Each time a bank checks your score, your score will dip by a few points.

TIP: If you are applying for a loan or a Credit Card, do not apply to many banks at the same time. Too many enquiries will hurt your Credit Score.https://www.youtube.com/embed/6Y2bSXbXvDk?enablejsapi=1&origin=https%3A%2F%2Fwww.bankbazaar.comWhat is a Free Experian Credit Score?

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Factors that Lower Your Credit Score

It is understood that having high balances on your credit card can significantly reduce your credit score. Apart from that, there are several other factors that can hurt your credit score:

Being late on your credit payments.
Completely ignoring your loan dues/credit card bills.
Creditors charge off accounts when credit card bills are not paid on time. The status of having your account charged off is one of the worst incidents that reflect on your credit score.
Lenders use third-party debt collectors to retrieve the loan amount from you, in case they do not receive payments. Having your account sent to collections reflects very poorly on your credit score.
Filing for bankruptcy can have a devastating effect on your credit score.
When you request to close a credit card that has an outstanding balance, your credit limit drops to Rs.0. This is similar to a situation where you have maxed out your credit card.
Closing old credit cards shortens your credit history. This has a negative impact on your credit score.
Applying for multiple credit cards or loans within a short duration makes your credit score plunge. Hence, it is advisable to limit the number of applications.
Having only one type of credit account will negatively impact your credit score. So, you should look to maintain a mix of loans and credit card debts and make consistent payments on time.
If you fail to check your credit report occasionally and fix errors, if any, your credit score can be hurt. It should be understood that credit reporting bureaus also make mistakes when creating credit reports. If you do not monitor and correct your report, it may cost you a lot in the future.
It is better to have a good balance of secured as well as unsecured loans in your credit history.

Courtsey To : Bankbazaar