If you are a financially conscientious individual, you already know by now that your credit score is a important three digit numeric that is regarded as a barometer of your financial health. The details of your credit score feature in your credit report. This is a document that a credit bureau like CIBIL compiles on the basis of how you handle your credit.
This document is referred to by traditional lenders as a part of the credit assessment process. A blemish free credit report can thus be called a ticket to timely credit at competitive rates of interest. You thus need to be in the know of your credit report. Here are some secrets about your credit report that no one will tell you, that will help you maintain healthy credit record.
No credit does not mean a good CIBIL score
Those who are wary of credit tend to think that having no credit exposure is a good thing and it reflects well on one’s credit report. On the contrary, having no credit exposure works against you. When you have no credit record on your CIBIL report, lenders cannot assess your ability to repay a loan that you may need urgently.
A non-existent credit record may make them wary of giving you a loan when you need it the most. Thus it is advisable to keep at least one credit card and make small transactions such as utility payments with it. Timely repayment of credit will help you establish and build a good credit record.
You can access one free CIBIL report in a year
You may have read many financial education articles that advocate that you need to keep a periodic check over your CIBIL report. You can access your credit report as many times as you want in a year by paying a fee of Rs 500 each time. However, what you may not be aware of is the fact that CIBIL, India’s premiere credit bureau, provides the facility of one annual CIBIL report check free of cost. Thus if you do not use credit often, you can access one free CIBIL report annually to ensure that your credit health is in order.
Your CIBIL report will carry details of a loan you stand as a guarantor for
You may have a stellar credit record as you are financially responsible. A friend or relative who you are very close to may thus want to stand as a guarantor for a loan he needs. You think of it as a just a formality and agree to act as a guarantor for his loan. What you may not be aware of that by standing as a guarantor for his loan, the details of this loan account appear on your free CIBIL report and any default on the same will reflect on your report as well. This may bring your score crashing down and impact your ability to opt for credit when you are in need of the same. Thus think very carefully before you agree to guarantee someone else’s loan.
You can get a loan with a poor CIBIL score
If your CIBIL score is poor and your CIBIL report is in bad shape because of some mishaps, do not fret. While a traditional lender will not give you a personal loan without CIBIL check, you can avail of a loan from a non-traditional lender such as a P2P lending platforms. These are virtual loan marketplaces where you can get in touch with a lender directly. While it is not to say that these lenders do not give out Personal loans without CIBIL check there are other atypical credit assessment methods that these lenders carry out. These include tracking your social media footprint and assessing your future income prospects.
Armed with this information about your CIBIL report, you can make a conscious effort to keep your CIBIL report blemish free for access to cheap and timely credit.