Credit Score: Has your credit score dropped? You can improve it yourself in these 5 ways..
In today's world, your credit score is a crucial component of your financial health. It is a three-digit number, typically ranging from 300 to 900. In India, credit bureaus such as TransUnion CIBIL, Experian, Equifax, and CRIF High Mark generate this score. Generally, a score of 750 or higher is considered good, while a score of 650 or lower may be viewed as poor. Your credit score can influence how easily you obtain a loan, the interest rate charged, and the terms offered by the bank.
Sometimes, incorrect information can appear in your credit report through no fault of your own. Even a minor error can negatively impact your score; therefore, it is essential to check your credit report periodically.
Adopt these simple and effective habits for better sleep:
1. Check your credit report regularly
Do not wait until you are applying for a loan to check your report; review it periodically. Carefully examine details such as your name, address, loan accounts, outstanding balances, payment history, and recent credit inquiries. If you spot any information you do not recognize, investigate it immediately.
2. Look out for unfamiliar loan accounts
If your report lists a personal loan, home loan, or any other credit account that you never took out, do not ignore it. This could indicate a reporting error or fraud. In such cases, immediately lodge a complaint with the credit bureau and the concerned bank or lending company.
3. Check your payment history
Sometimes, a payment may appear as "late" in the report even if you paid your EMI on time. Cross-check the payment history in your credit report against your bank statements, loan statements, and payment receipts. If you find an error, get it rectified immediately.
4. Check for closed loans and duplicate entries
If you have fully repaid a loan, its status in the report should be listed as "closed." It should not show an incorrect outstanding balance or display wrong information such as "Active" or "Settled." Also, ensure that the same loan is not listed twice.
5. Raise a complaint if you find an error and check for updates
If you discover an error, double-check the relevant documents and dates. Subsequently, file a complaint with the credit bureau and submit the necessary documentation. Keep tracking the status of your complaint after filing it. Once the correction is made, be sure to review your updated credit report.
Improving your credit score does not always require drastic changes. Often, simply rectifying incorrect information in your credit report can lead to an improvement. Therefore, check your report regularly and have any errors corrected immediately.
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