It's natural to feel bad when despite working hard towards building a high CIBIL score you find out that your efforts have gone in vain. However, if it makes you feel any better- you are not the only one.
More and more people are realizing the importance of their credit report. So, they develop good credit-building habits and become more responsible towards finance management. However, sometimes they efforts don’t bear the fruits.
Ideally, you would want the following things on your free CIBIL report:
People who have a long credit history are not only able to get a high credit score but are also able to enjoy easier loan approvals than others who have a short credit history. The reason is simply- the more experience you have with debt management, the easier it’s for a lender to trust you.
It's important to have a good credit mix on your credit report for a high score. So, it would include a personal loan, credit cards, and a mortgage perhaps. While there is no particular kind of credit that you must have, the important thing is that there should be a variety.
Lenders want to see a good repayment history in the credit report when they receive loan applications. Thus, your CIBIL report should show timely payments for your credit card bills or the EMIs you have paid for a personal loan, car loan, etc.
Seeing your name on a loan defaulter list can be hurtful. However, it's often equally hurtful to find out that all the good things you have done for your credit report are not mentioned in it at all.
The following are some of the common reasons why the good stuff could be missing from your report:
Sometimes, the reason why you don't see your credit activities on your credit report is that the bank or financial institution hasn't reported the same to the credit rating agency.
The problem here is that there are many credit rating agencies in India viz. CIBIL, Equifax, High Mark, etc. There are many smaller credit rating agencies too. So, it's possible that the agency, from which you have obtained your credit report, isn’t linked to your bank. Some banks report the details of their customers to only select agencies.
If you want to make sure that your repayment history, bank accounts, etc. are accurately reported to all the major rating agencies, then it’s best to inform your bank of the same.
Most of the credit rating agencies update their records on a monthly/quarterly basis. So, if you opened a new credit card account only a week back or two, and checking your credit report, it's possible that the reason why it isn't reflected on the same is that you checked too early. It's usually best to wait at least 3 months before checking your report.
Mistakes in credit information reporting are more common than you think. There are times when a bank may send erroneous information to the credit rating agency. Sometimes, your repayment history is updated on a wrong person's report.
To avoid these mistakes, it's best to monitor your credit report yourself. So, if you find any discrepancies, you can immediately contact your bank or the rating agency itself. After all, you don't want to wait several months before realizing that your name has been accidentally put on a loan defaulter list.
It all boils down to this- knowledge and awareness are the true power when it comes to proper credit management and creating a healthy credit report. It's important to manage your debt well, but it's even more important that your efforts are recognized. So, make it a point to check your report every few months.