How to Check Credit Score for Free?

Loan and credits are a great source of growth and prosperity for an individual as it gives access to the liquid cash that can be used for various requirements.

There are various types of loans- personal, business, home, car, etc. which you can apply for. The bank offering loans charge interest on the principal amount and this is the primary source of income for the banks.

Banks take a huge risk by lending you the money as the recovery of the money always depends on the person, therefore, banks use a credit score to rate an individual for his/her credit behavior.

Credit behavior is the historic record of the loans that you’ve taken from the banks and reviewing your repayment behavior. By reviewing this behavior, the banks can feel secure enough to lend you the money as this helps them in determining your creditworthiness and integrity to repay the loans that you’ve taken.

How to Check Credit Score for Free mudra

This system of finding your creditworthiness is known as credit score. In India, there are four credit information companies licensed by the Reserve Bank of India.

These companies check your credit history and score you in three digits from 300 to 900. The higher the score is the higher your creditworthiness is.

The following are the Credit Information companies that you can choose from for finding your credit score.

  • Experian
  • Equifax
  • CRIF High Mark

What Is Credit Score and Why it is Important?    

A Credit Score is a three-digit number provided by the Credit Information Companies to an individual after reviewing his/her credit history.

Credit Score can range anywhere from 300 to 900 and 300 being the lowest credit score and 900 the highest. A credit score of more than 750 is considered a very good score and almost all the loans can be offered in this score.  

You’ve to maintain your credit score with good credit behaviors. Regular payments of loans can be a great way of keeping your credit score.

Benefits of Maintaining High Credit Score

The following are the benefits of maintaining high credit scores-

  • Easy availability of loan and credit cards with a higher loan amount
  • Relatively attractive interest rates as banks feel low risk for offering you a loan
  • With a high credit score, you’ll have better negotiation power with the lenders
  • You can apply for premium credit cards with higher credit limits that offer attractive cashback, points, and offers

How to Check for a Credit Score for Free?

You can follow these steps to check your credit score for free-

  • Visit the official website of CIBIL, Experian, Equifax, or CRIF High Mark and click on the register button
  • Now, a form will appear where you’ll have to enter details like Email, Name, mobile number, and date of birth. Also, you’re required to choose ID type along with providing documents ID number in the form
  • After entering the details, click on the accept and continue button
  • Now, you’ll have to verify your identity by entering the OTP sent on your mobile number
  • After entering the OTP, your credit score will be shown on the left-hand side of the screen

Note- The process of finding the credit score can be a little different for different credit information companies. You can easily register on their website and find your credit score by visiting their official website.

How to Improve Credit Score?

You can improve your credit score by following these steps-

  • Pay your loan amount on time without any delays or low payments.
  • Your bank account will have an automatic EMI deduction, so make sure to keep your account enough funded
  • Your credit card also plays an important role in maintaining your credit history. So, pay the credit card bill on time
  • Don’t use credit card fund utilization more than 30% of your credit limit. Only exceed this limit in case of absolute need
  • Hire a credit repair professional who can help you with improving your credit score
  • Don’t apply for a lot of credit cards, only apply for a few that you can manage without a problem
  • Don’t surrender your credit card ever, this negatively impacts your credit score

What if I Do not have a Credit History?

In some cases, especially for the people who did not have had any loans or credit cards, the credit score could be unavailable. Most of the credit cards and loans will only be offered to individuals who have valid credit scores.

To build your credit score, you can apply for a credit card based on your salary or ITR. For students, you can open an FD account which is attached with a credit card. Many banks provide FD credit cards to users who want to start building their credit history.

After 6 months, you can check your credit score or after 1 year, you’ll get your credit score easily. The FD associated with your credit card can be redeemed after a year and you can contact the bank and ask them to provide you with the credit card without FD. The bank usually provides the credit card automatically also, they’ll update your credit card limit as well.