Why Should You Check Your Credit Report Regularly?

3 min 22 Mar 2023

Importance of Regular Credit Report Checks

Highlights

Why You Must Check Your Credit Report Regularly
How Often Should You Check Your Credit Score

Checking your credit report regularly is essential to maintain good financial health. It allows you to identify errors or discrepancies that could negatively impact your credit score and take corrective actions. Also, knowing your credit standing helps you prepare before applying for loans or credit cards, improving your chances of approval and securing better terms.

In this article, we discuss the importance of checking your credit report regularly as well as how often should you do it.

Here is Why You Should Check Your Credit Report Regularly

Let us look at why you should check your credit report regularly.

You Can Spot Errors and Rectify them in Time

Credit information bureaus use the information availed of from various lenders to create a borrower’s credit report. Any inaccuracies in the report can lead to a decrease in your score. If your credit score goes below 750, you may find it challenging to get approved for a loan. You must check your credit report from time to time and immediately report any errors. Rectifying these errors can take a few months. So, you must check your credit report often and report errors as soon as possible.

You Can Take Corrective Measures on Time

If you realise that your credit score is below 750, you must take corrective measures immediately. To improve your CIBIL score, pay all EMIs and credit card bills on time, reduce your credit utilisation ratio, clear small debts, and limit applications for new loans. Keep in mind that it takes time to improve your CIBIL score. You should check your credit report often so that they can start taking corrective measures immediately if need be. It is also important to check your credit report regularly to understand how a missed or delayed EMI payment affects your credit rating.

Monitor Credit Activity

Monitoring your credit activity by regularly checking your credit report is important to detect any unauthorised activity or signs of identity theft. If someone gains access to your personal information, they may open credit accounts, make unauthorised purchases, or take out loans in your name. These fraudulent actions can significantly harm your credit score and financial well-being.

By reviewing your credit report, you can identify unfamiliar accounts or suspicious inquiries that may indicate fraud. Early detection allows you to report the issues to the relevant authorities, such as the credit bureau or the financial institution, and take necessary steps to resolve the matter before it negatively impacts your credit standing or leads to financial loss.

How Often Should You Check Your Credit Score?

When a lender enquires about a borrower’s credit score, it is known as a hard enquiry. Too many hard enquiries negatively impact a borrower’s credit rating. On the other hand, when you check your credit score, it is registered as a soft enquiry. Soft enquiries do not impact your credit rating. You can check your credit score several times without affecting your credit score. It is advisable to check your credit score more often to assess your financial health.

Also Read: Ways to Check Your CIBIL Score Online

How to Check Your Credit Report

While there are websites that perform CIBIL score check free, these websites cannot be entirely trusted for accuracy. Therefore, it is advised that borrowers should check their credit score on the official website of CIBIL.

To check your CIBIL score with an Aadhar Card or PAN card, simply follow these steps:

Go to the official website of TransUnion CIBIL and select the option ‘Get Your CIBIL Score’.
To be able to see your CIBIL score on TransUnion CIBIL, you will have to pay a fee. If you want to check your credit report regularly, select a subscription plan.
Provide basic details, such as your date of birth, email address, phone number, etc. You will also need to create a password for your account.
If you are checking your credit report by PAN Card, enter your PAN details. Otherwise, enter your Aadhar details.
Verify your identity by answering all the questions.
Enter your account by paying a small fee based on the plan you have chosen.
Login to your account and fill out the CIBIL score display form.
TransUnion CIBIL will tell you your credit score and send you a detailed credit report in your account.

People Also Read: How to Check Your CIBIL Score for Free in India

Final Words

Your credit report and credit history play a significant role in determining whether you will be approved for a loan as well as the terms and conditions, including the rate of interest, you will get on your loan. If your credit score is 750 or above, availing of credit can become easy.

If you are planning to apply for a loan, you should check your credit score at least once every six months and take corrective measures in time to ensure quick approval and beneficial loan terms and conditions.

Also Read: Check CIBIL Score with PAN Card for Free, in 3 Steps

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