Confused from the difference between credit report and credit score? The sections that follow will help you understand these two better. These two things look more or less one and the same to the untrained eye. But if you look closely, you can see the variations in how they affect the financial health of an individual.
As the name suggests, a credit report includes all information, including the history and payments of your loan accounts. It usually requires payments by credit card and various loans, such as car loans, home loans and education loans. They also have the status such as questionable loans, settled loans, etc.
A credit score, on the other hand, is a statistically generated 3-digit number from 300 to 900 based on the credit history of an individual as set out in their credit report. The payment history, accounts due, credit history, credit kinds and new credit information will produce it.
Simply put, a credit report is a debt history card. It also contains a variety of personal data such as names and addresses, PAN card information, known addresses and telephone numbers. Your loan/credit card records, date of the loan, current balances and whether a person pays his/ her banknotes on schedule, and whether the accounts are in arrears, will also be included in your credit report.
Any inquiries for new credit will be reported in the credit report. In fact, a credit report documents the degree to which an individual has maintained their payment arrangements and current balances with various existing and former lenders.
The credit score, on the other hand, is just a numerical representation and description of a credit relationship. After calculating the credit limits for a person's loans on all loan amounts, debt repayments, accounts number and overall credit history, credit scores are determined.
WHO PROVIDES CREDIT REPORTS IN INDIA
Credit reports are issued by four Credit Information Companies( CIC) or Credit Bureaus in India, but CIBIL TransUnion is the most widely used and accepted credit bureau . Experian ,Equifax and Highmark CRIF are thre other CICs which currently work inIndia.
HOW ARE THEY CONNECTED?
A higher credit score for your credit report constitutes a lower credit risk for new loans, and vice versa. So, the higher your credit score, the higher the credit worth of the borrower and the lower the perceived risk of lending you more money. Although your credit report includes your entire credit history, your credit score sums up the credit history and serves as a snapshot of your past and present loans
A higher credit score for your credit report constitutes a lower credit risk for new loans, and vice versa. So, the higher your credit score, the higher the credit worth of the borrower and the lower the perceived risk of lending you more money. Although your credit report includes your entire credit history, your credit score sums up the credit history and serves as a snapshot of your past and present loans
It is highly likely that when you apply to a loan or a credit card, the prospective lender will draw your credit appraisal. This helps them define the potential credit risk of the borrower. The closest you get to 900, the greater the likelihood that the bank will accept your loan or credit card application. Many businesses have pre approve loan offers . The lender may offer a loan at a preferred interest rate or a credit card that has a higher credit limit when the credit value is within a certain amount, but all the other terms and conditions are most likely to be the same.
HOW TO ACCESS CREDIT REPORT AND CREDIT SCORE?
Your credit report and credit score can be obtained from one of India's four credit reporting agencies ( CICs). This can be done by visiting the respective credit reporting agency's website and following directions, such as the completion of the online application form and submitting a demand draft or cheque to cover the fees. You can review your credit score and credit report at least once a year before you apply for a new loan or credit card. Continue to periodically review your credit report for potential error, complete payments on time and ensure that more than 30 percent of the credit card's total limit is not used by you.