There are many ways you can take a personal loan, be it going personally to the bank or using an instant loan provider app. Both methods are useful, and you get a loan quickly. But, one thing that is very important while applying for a loan is your credit score. It is necessary to maintain the credit score, and you should know how to read it. In this article, you will be notified to check your credit score using an online loan app and how to maintain it.
What is a Credit Report?
A credit report is a report that mentions your credit history. How much loan you have availed of, were there any bounces, and is there any other loan you still have left. Your credit score helps the lenders in deciding whether to grant you a loan or not. The credit report has mainly three parts: Personal info, Accounts, Enquiries.
How to Check Credit Reports Online?
The Internet has made everything easy. Now you can check your credit score online also. Companies such as Fullerton India have the facility to provide users with the service to check their credit score. The steps are:
- Click on ”Free Credit Score”
- Now submit your details that are asked along with your PAN card number.
- You will get an OTP on the number you have given.
- Enter that OTP, and you will have your free credit report in an instant.
- You will get your credit score along with your credit report of the past loans or cards you have taken.
How to Read a Credit Report?
The credit report contains your credit score and account information. Here is how to read it:
- Credit score: credit score is based on your past performance of the debt you have taken. It ranges from 300 to 900. The more, the better.
- Report summary: it states the number of credit accounts, your current accounts, and your enquiry summary.
- Credit Account Information Summary: It summarizes your credit history and all the information, such as your past loans and outstanding balances.
- Credit account information details: in this section, all your information regarding your bank account, including the loan account, is given. When did you take a loan, how were your EMIs going, any overdue, etc.?
- Credit inquiries: The credit inquiries are the banks you had asked for a loan and were there any rejections that you faced. Credit inquiries affect your credit score.
Why Does the Credit Score Go Down?
- Many rejections from the banks or lenders lead to lower credit scores.
- If you bounce your cheques or skip an EMI, then also your credit score goes down.
- If your credit card is closed by the issuer, it also affects your credit score.
- If your credit card limit is lowered, it affects your credit score.
How to Improve or Maintain a Credit Score?
- Make all your payments on time.
- Keep your credit card balance low.
- If you feel your score is low because of some misunderstanding, then get them corrected on time.
- Avoid applying for new credit too often.