What is Credit Score Report? How to Check Your Credit Score for Free?

Credit Score Report

The credit report is essential financial information based on which lending institutions measure an applicant’s credit risk level or likelihood of paying the EMIs on time. It includes information about different credit accounts in an individual’s name, including their payment history, credit limits, financial obligations, etc. 

Credit bureaus calculate an individual’s credit score based on this information, making it an essential parameter to determine creditworthiness. So, it is crucial to understand what a credit report is and know how to perform a credit score check online. Here is some essential information one needs to have.

What is a Credit Report? 

A credit report contains details about an individual’s credit, like personal loans, business loans, credit cards, overdraft facilities, etc. It mentions the debtor’s repayment history over a while. A credit report is crucial for several reasons:

  • Allows financial institutions to assess an individual’s creditworthiness
  • Financial institutions use the information in it to extend loans 
  • Regular analysis of the credit report and free credit score check inculcates financial discipline and avoids debt trap
  • A credit report with positive details enables a loan seeker to get competitive interest rates

What Does a Credit Report Contain?

A credit report has several sections that offer complete details of an individual’s credit history. Before knowing how to check a credit score, it’s crucial to understand the components of a credit report. It includes the following sections:

Credit Score: A 3-digit number based on the individual’s credit behavior.

Personal Information: Contains the individual’s name, date of birth, gender, and identification numbers like passport, voter ID, or PAN card numbers.

Contact Details: Contains up to four addresses and phone numbers. 

Employment Details: Contains details of an individual’s monthly and annual income, as reported by the lending institutions.

Account Details: Contains details of different credit facilities, like the lending institution, types of availed credit facilities, account numbers, loan amount, date opened, last payment date, ownership details, a record of payments, and current balances.

Inquiry Details: The financial institution will perform a credit score check online by accessing the applicant’s credit report with each personal loan application. It is a hard inquiry containing the lending institution’s name, credit type, the amount applied, and the date

How to Get a Credit Report?

Everyone can get one free credit report from each bureau in 12 months. Before applying for a loan, you can also check your credit score for free on the website of reputed lending institutions like Clix Capital.

Getting an extra credit report for free is also possible in the following situations:

  • If you receive a notice that your credit was denied due to adverse action on the credit report
  • If your file has errors or inaccuracies due to fraud
  • If your credit reporting agency has an initial fraud alert
  • If you are unemployed and want to apply for a job within the next 60 days

Lending institutions use credit reports to evaluate an individual’s creditworthiness before extending credit. Additionally, the information present in the credit report is essential to perform a credit score check online.

Steps to Perform a Free Credit Score Check 

Don’t know how to check your credit score for free? These are the steps to follow:

  • Find which credit bureau’s score the lending institution accepts
  • Visit the bureau’s website and locate its credit-checking tool
  • Fill in the required details
  • Confirm the request
  • Get your credit score online

Some NBFCs also have credit-checking tools on their websites. Just follow the on-screen instructions to do a credit score check online. Using an NBFC tool to check credit scores saves the time and hassle of opening new tabs and visiting different websites. It also involves the risk of using a fraudulent website that claims to belong to the credit bureau. Therefore, use the credit checking tool on your NBFCs like Clix Capital Experian to check the score safely.

Although credit score is not the only factor lending institutions check to determine loan eligibility, maintaining a decent credit score improves the approval chances and helps get the best interest rates and high loan amounts. Reviewing the credit report regularly ensures that its information is complete and accurate. Follow instructions on how to check your credit score online and monitor your credit to maintain credibility.