Here’s how you can get your credit score for free

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Credit score plays a vital role when you approach lenders to fetch a loan. It is important for landing a good job and even a spouse. Some employers, especially in the financial services industry, check it before they hire you in a role. A lot of families, in the arranged marriage set-up, enquire about ongoing loans and credit score.

“Having a higher credit score implies a sterling credit history and on-time repayments. This makes you an attractive customer to the lender and gives you an edge when negotiating for rates. You have the option of selecting lender with the best rates and even getting a premium on the rates because of your score. This would mean a lower interest rate or spread, and can translate into higher savings,” says Adhil Shetty, co-founder and CEO, Bankbazaar.com

Methodology

There are four credit information companies (CICs) – CIBIL, EQUIFAX, EXPERIAN and CRIF High Mark Credit Information Services. They have their own criterion to define a good and a bad credit score. CIBIL Credit score is most popular. Any figure above 700 is considered good.

An individual should frequently check credit score to ensure that it is updated and has not been reduced for an unknown reason. If you find a discrepancy, you should instantly reach out to the CIC.

“There is always a possibility that errors creep into your credit report. This could be minor differences in repayment dates to major problems like a loan or credit card account not closed but settled or even downright identity theft that could lead to a drop in your credit score. The sooner you have a view into this, the sooner you can correct your course,” says Shetty.

Checking credit score for free

Not many people know that the Reserve Bank of India (RBI) had mandated in 2016 that every individual is entitled to have a free copy of the report at least once in a calendar year. Upon request from the CICs, they are bound to give you a detailed credit report for free. Any additional credit report requested in a given calendar year will be chargeable.

“The credit report includes all the details including the credit score and is similar to the full credit report accessed by banks and NBFCs while considering the request for fresh loan or credit card,” says Shetty.

There are banks and online platforms such as Bankbazaar.com which may give you free credit reports multiple times in a year.

“When you source your Experian credit report through BankBazaar, you do not have to pay anything for the first or subsequent credit reports. It is a completely online process that takes only a couple of minutes. Moreover, there is no cap on the number of credit reports you can request in a year,” says Shetty.