Credit Score Check l A Healthy Financial Practice you Must Adopt

Creating budgets and sticking to them, creating an impressive portfolio to build wealth, and buying health and life insurance to prepare for contingencies. These are all healthy financial practices one must adopt to secure their financial future. However, there is one thing missing that most people usually neglect – conducting a credit score check.

While some do not realize the imperativeness of credit scores, others are too afraid to come to terms with their credit behaviour.

Just like you have an academic report card of your performance at your school or college, you have a credit report that reflects your credit performance. You need to have a look at it by conducting a credit score check to eliminate any obstacle that obstructs your way of fulfilling your financial goals.

Why Conducting a Credit Score Check is Crucial?

Whether you are planning to buy your dream home or planning to fund your child’s education, you need sizeable funds. Even if you have adequate savings, consuming all of it to fund these expenses is not at all advisable. After all, you need savings to manage your everyday expenses in the present and the future. In such instances, you need to avail of loans to fund these financial endeavours while preserving your reserve and savings.

A credit score plays a crucial role when you are securing loans from banks and non-financial institutions. It determines your creditworthiness, i.e. if you are likely to pay the loans on time. A credit score is created on the basis of your credit behaviour. This includes the amount of loan you have secured, whether or not you have paid your bills on time, if you have exceeded your credit utilization limit and so on.

A credit score check becomes important for the following reasons:

1. You Will Get a Reality Check

Going through your credit report is as scary as checking your bank account statements. But both these practices are important if you want to create a strong financial standing in the future. As mentioned before, a credit score is an indicator of your credit behaviour. Conducting a credit check would paint a clear picture of your credit. It is important to know that conducting a credit score check will not damage your credit score. So, there’s no point in avoiding it; you would only be running away from things you must confront.

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2. Helps you Form a Backup Plan or Decide the Further Steps:

As we have established before, if your credit history is poor, your credit score will be lower. A low credit score increases the possibility of rejection of your loan application. This is why conducting a credit score check is important. If you do not do it, you wouldn’t know if you have an impressive credit score or a bad one. Here’s what you would do in both scenarios:

If it is Bad:

Approach 1 – You will take steps to increase your credit score.

Approach 2: You will form a backup plan if you need to secure a loan on an immediate basis.

Approach 3: You will procrastinate meeting your financial goal. 

If It is Good:

If you have an impressive credit score, you will not need to do anything. Just sit back, apply for the loan and ace your financial planning.

3. Helps you Rectify any Errors or Inconsistencies:

If you have paid your bills or loans on time, didn’t exhaust your credit limit, or didn’t apply for multiple loans at the same time and still find your credit score to be low, it may be because of errors made on the credit bureau’s side. Such errors are common instances and may impact your financial goals for the worse. Hence, they need to be corrected. You need to contact the credit bureau for the same and place a request for rectification. They would conduct their verification and correct it if it were a mistake on their end.

What do you Need to Know About Credit Score a Check?

1. It ranges between 300 to 850. While a credit score ranging between 720-850 is considered excellent, a credit score between 690-719 is considered good, a score between 630-689 is considered average, and 300-629 is considered poor.

2. You can conduct a credit score check for free innumerable times.

3. You can do a credit score check on CIBIL’s official website. You might need to do a KYC to proceed with the credit score check.

4. You can enhance your credit score by paying your bills on time, consuming less credit, and do not apply for multiple loans at once. If you adopt these healthy credit habits, your credit score will see an improvement after 6 to 12 months.

The Bottom Line:

A credit score check is a healthy financial practice you must adopt to secure your financial future. So, what are you waiting for? Head to CIBIL’s website and conduct a credit score check for free.