Your Credit Score carries weight …
Your Credit Score is nothing more than just a 3 digit number, which will be a source of happiness for you in terms of availing best loan rates and new credit cards in the market.
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Trace your Credit Health
Fill out the form just once and track your Credit score for free with ease to make smarter financial decisions and maintain a strong credit profile.
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Get in-depth Knowledge
See what makes your score change to enhance strategies to improve your credit health.
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Make wiser decisions
Personalized recommendations based on your Credit history to save money & spend wisely.
THE CREDIT STORY
The history of credit scores in India began in the late 20th century when lending was primarily based on personal relationships and informal systems. In early 2000s, banks and financial institutions relied on subjective methods like assessing income and assets to determine creditworthiness, which often led to inconsistent lending practices. This lack of standardization made it difficult for many borrowers, particularly in urban and semi-urban areas, to access formal credit.
The turning point came in 2000 with the establishment of CIBIL (Credit Information Bureau India Limited), which introduced the first formalized credit score system in India. This new system used a numeric score ranging from 300 to 900 to evaluate an individual’s creditworthiness based on their credit history. As India’s financial landscape evolved, the RBI has recognized the importance of credit bureaus, and the government encouraged more companies like Experian and Equifax to enter the market. This shift improved the accuracy and transparency of lending, benefiting consumers and financial institutions alike.
The Indian government’s push for a Digital India and financial inclusion has led to the integration of credit scores into various digital platforms. With the growing number of individuals participating in the digital economy, the demand for credit is only expected to increase, making the credit score system even more integral to India’s financial ecosystem.
Detailed explanation of Credit score Calculation:
Steps to get your Free Credit Score: Perform a credit score check online effortlessly.
- Visit Loan Bazaar Credit Page.
- Enter your first and last name.
- Enter your email address.
- Add your pan no.
- Select Category (Salaried/ Self-employed/ Professional)
- Select the type of loan
- Add your mobile number
- Your Credit score will be displayed on the screen.
- You can download your report.
Definition of Credit Score:
Credit score can simply be defined as a rating system that numerically represents the ‘Creditworthiness’ of a borrower. It is in the form of a three-digit number. The credit score ranges from a minimum of 300 to a maximum of 900.
More importantly, as a borrower, you need to understand that the closer your Credit score is to 800-900, the better your chance of securing any type of loan or getting a credit card in India.
It is also advisable that you perform a Credit score check regularly.
Ranges of Credit Scores :
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NA/NH
This indicates that you have no records in Credit history.
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300-549
This range is considered as poor Credit score. It means you have been late in paying EMls for loans or credit card bills. With a Credit score in this range, it will be difficult to get a loan or a credit card as you are a defaulter with high risk.
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550-649
A Credit score within this range is considered adequate. It suggests that you will have difficulty paying off your debts on time. The rate of interest on your is also likely to be high.
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650-749
If your Credit score is within this range, you are on the right track. You need to continue to demonstrate good credit behavior and keep improving your score. Lenders will review your loan application and offer you a loan. However, you may not yet have the negotiating power to get the best interest rate on a loan.
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750-900
This is a good Credit score. It suggests that you are repaying your loans regularly and have a great payment history. Banks will also give you loans and credit cards considering that you are at the lowest risk of defaulting on your loans.
THE CREDIT STORY
The history of credit scores in India began in the late 20th century when lending was primarily based on personal relationships and informal systems. In early 2000s, banks and financial institutions relied on subjective methods like assessing income and assets to determine creditworthiness, which often led to inconsistent lending practices. This lack of standardization made it difficult for many borrowers, particularly in urban and semi-urban areas, to access formal credit.
The turning point came in 2000 with the establishment of CIBIL (Credit Information Bureau India Limited), which introduced the first formalized credit score system in India. This new system used a numeric score ranging from 300 to 900 to evaluate an individual’s creditworthiness based on their credit history. As India’s financial landscape evolved, the RBI has recognized the importance of credit bureaus, and the government encouraged more companies like Experian and Equifax to enter the market. This shift improved the accuracy and transparency of lending, benefiting consumers and financial institutions alike.
The Indian government’s push for a Digital India and financial inclusion has led to the integration of credit scores into various digital platforms. With the growing number of individuals participating in the digital economy, the demand for credit is only expected to increase, making the credit score system even more integral to India’s financial ecosystem.
Tips from Loan Bazaar to improve Credit score:
Are you looking to take a loan at a minimum ROl or get a Best Credit Card in India? If yes, given below are three points of recommendation that we at ‘Loan Bazaar’ feel you can use Credit score check online to get a Good Credit Score.
1. Use of Balance Transfer Facility:
If you are looking to get a Good Credit Score then, one of the best ways is to use Balance Transfer. The BT facility allows you to transfer your current loan from one bank to another at the lowest interest rate available. It enables you to manage credit at lower interest rates and thereby helps you to pay your EMI on time, which has a positive effect on your Credit Score.
2. Debt Clearance:
It is necessary that you clear the unnecessary burden of debts you are facing in your life. The ideal way to do it is by not keeping more cards or securing extra loans when not needed.
3. Credit History Impact:
Maintaining good ‘Credit History’ is a popular method that can be used in improvisation of your Credit score. It can be done using the following steps given below:
- Pay the EMI on any loan that you take on time
- Prior to seeking a new loan you need to completely repay any existing credit
- When taking a loan, it always take a long tenure so you need to pay low EMIs
- Factor that can help improve your Credit History is your credit utilization ratio. Therefore, while paying a loan you need to limit credit usage to the amount sanctioned by your lender. If your limit is exceeded then your Credit Score gets lower and ‘Credit History’ gets affected.
Benefits of a Good Credit score :
- Get The Best Credit Card –A good score may get you the best Credit Cards. Get a feature-rich card and enjoy its benefits.
- Quick Loan Approval –A good score works like an express way for your loan application approval. Banks can approve your application quickly and easily.
- Better Interest Rate – With the backing of a good score, you can bargain for a lower rate of interest on Credit Cards and loans.
- More Affordable Loans – Loans Come With Processing Fees And More You can bargain your way out of these charges with a good Credit score
Few reasons for you to maintain a Good Credit Score:
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Easy access to a loan with the Lowest Interest
Rate:
A significant advantage of having a Good Credit Score is that the chances of you getting a loan from the lender at a minimum interest rate increases. It is because a lender on seeing your Good Credit Score will consider you ‘Creditworthy.
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Improvement in loan eligibility:
When you have a Good Credit Score it shows the lender that you have a good loan repayment history and therefore you are ‘Creditworthy’. A major reason for any financial institution to offer you the Best Loan in India at the lowest interest rate available.
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Get the Best Credit Card in India:
Like loans you need to have Good Credit Score to have a greater chance to get the Best Credit India, that offers lifestyle-related benefits such as CASHBACK’ and ‘REWARD’ points. This is because possessing a Good Credit Score represents a reliable ‘Credit Behaviour’ and shows your ‘Creditworthiness’ to the lender.
Reasons for a Low Credit Score:
Credit score plays a very crucial role to determine your creditworthiness with lenders, as it reflects how likely you are capable to repay borrowed funds. A low Credit score may label you as a high-risk borrower, which can lead your loan application being rejected. It is important to understand the underlying reasons for a low Credit score to maintain a healthy score.
Here are some common factors that contribute to a low Credit score:
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Delayed Repayment of Loans and Credit Card Dues
Consistently missing or delaying the repayment of your EMls for loans or credit card balances can significantly impact your credit history, lowering your Credit score.
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High Credit Utilization
Using a large portion of your available credit limit (more than 30%) on a regular basis can signal to lenders about your financial eligibility. This can harm your credit score over time.
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Unbalanced Loan Mix
A poor mix of secured and unsecured loans can also affect your credit score. It’s advisable to have a higher proportion of secured loans (like home loans or mortgage loans) compared to unsecured loans (such as personal or business loans), as they are typically seen as less risky by lenders.
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Frequent Hard Inquiries
When you apply for multiple loans or credit cards in a short period, lenders make hard inquiries into your credit report. Each inquiry can lower your credit score, and various inquiries within a short period can address desperation for credit, which may make you appear to be a risky borrower.
Addressing these issues can help you improve your credit score and increase your chances of loan approval.
Importance of Credit score:
Faster credit approval
Lower interest rates
High credit limit
Hassle-Free Application
How do you download a PDF for a credit score check online?
To download your Credit report, follow these instructions.
- Go to the Loan Bazaar Credit page dashboard.
- Click on the option ‘Check your Credit score’ to access your credit report online.
- Then click on the ‘View My Report button.
- Check your credit reports
- To save your Credit report to your device, tap on ‘Download Report.’
Credit Information Companies in India:
There are four companies in India providing credit information.
- Experian Credit Information Company of India Private Limited
- TransUnion Credit Limited (earlier known as – Credit Information Bureau (India) Limited)
- CRIF High Mark
- Equifax Credit Information Services Private Limited (ECIS)
FAQs
What details do I need to check my Credit score?
To check your Credit score, you need to provide the following information:
- Full Name
- Personal Email Address
- PAN Card Number
- Registered Contact Number
What is the purpose of Credit reports?
Credit reports are used to evaluate an individual’s creditworthiness by analyzing their credit history, including loan repayments and any outstanding debts. Lenders, banks, and financial institutions rely on these reports to decide on loan approvals, set credit limits, and establish interest rates. Credit reports are essential for assessing financial behavior and managing credit risks.
Why is it important to check my Credit score?
Credit reports evaluate an individual’s creditworthiness by analyzing their credit history, including loan repayments and any outstanding debts. They are essential for assessing financial behavior and managing credit risks, including free CIBIL scores and reports.
Why do I need a PAN card to check my Credit score?
Your PAN card serves as an official identification linked to your financial records and bank accounts, enabling a credit score check free online by PAN number.
Is a CIBIL score the same as a Credit score?
No, they are not identical. The term “credit score” refers to the numerical rating provided by various credit agencies, such as TransUnion CIBIL, Experian, and Equifax. The specific score provided by TransUnion is known as your CIBIL score.
Can owning multiple credit cards affect my Credit score?
The impact of multiple credit cards depends on how you manage them. If you have several cards with high limits and you either overuse or underuse them, it can negatively affect your score. Responsible usage, however, can have a positive impact.
Why do lenders check my credit score before approving a loan?
Lenders review your credit score to check your creditworthiness and determine your loan repayment ability. Your credit score helps them evaluate the risk involved in lending money to you, ensuring they make informed decisions.
What is a soft inquiry?
A soft inquiry can occur in several situations, such as:
- When you check your Credit score.
- When a landlord or employer reviews your credit score (with your consent).
- When a lender assesses your credit score to pre-approve you for a loan or offer.
Do soft inquiries affect my credit score?
No, soft inquiries do not impact your credit score. Since you’re not applying for credit, there is no negative effect. You can safely check your Credit score without worrying about lowering it, even if you’re considering applying for a loan or credit card.
What is hard inquiry in credit score check?
A hard inquiry occurs when a lender checks your credit score and reports it as part of the loan or credit card application. This type of inquiry can temporarily decrease your credit score.
Does a hard inquiry lower my credit score?
Yes, a hard inquiry can cause a slight temporary drop in your Credit score. When you apply for credit, the lender makes a hard inquiry to evaluate your creditworthiness, which can show up in your credit report and affect your score for a short time.