Definition of Credit Score:

Credit score can be simply defined as a rating system that numerically represents the ‘Creditworthiness’ of a borrower. It is in the form of three-digit numbers. The credit score ranges from a minimum of 300 to a maximum of 900.

More importantly, as a borrower, you need to understand that the closer your Credit score is to 750+, the better your chance of securing any type of loan or getting a credit card in India.

It is also advisable that you perform a Credit score check regularly.

Ranges of Credit Scores :

  • NA/NH
    This indicates that you have no records in Credit history.
  • 300-549
    This range is considered as poor Credit score. It means you have been late in paying EMls for loans or credit card bills. With a Credit score in this range, it will be difficult to get a loan or a credit card as you are a defaulter with high risk.
  • 550-649
    A Credit score within this range is considered adequate. It suggests that you will have difficulty paying off your debts on time. The rate of interest on your is also likely to be high.
  • 650-749
    If your Credit score is within this range, you are on the right track. You need to continue to demonstrate good credit behavior and keep improving your score. Lenders will review your loan application and offer you a loan. However, you may not yet have the negotiating power to get the best interest rate on a loan.
  • 750-900
    This is a good Credit score. It suggests that you are repaying your loans regularly and have a great payment history. Banks will also give you loans and credit cards considering that you are at the lowest risk of defaulting on your loans.

Detailed explanation of Credit score Calculation:

Steps to get your Free Credit Score: Perform a credit score check online effortlessly. 

  1. Visit emicalculator.net.in Credit Page.
  2. Enter your first and last name.
  3. Enter your email address.
  1. Add your pan no.
  2. Select Category (Salaried/ Self-employed/ Professional)
  3. Select the type of loan
  4. Add your mobile number
  5. Your Credit score will be displayed on the screen.
  6. You can download your report.

Benefits of a Good Credit score :

  • Get The Best Credit Card – A good score may get you the best Credit Cards. Get a feature-rich card and enjoy its benefits.
  • Quick Loan Approval – A good score works like an express way for your loan application approval. Banks can approve your application quickly and easily.
  • Better Interest Rate – With the backing of a good score, you can bargain for a lower rate of interest on Credit Cards and loans.
  • More Affordable Loans – Loans Come With Processing Fees And More You can bargain your way out of these charges with a good Credit score

Few reasons for you to maintain a Good Credit Score

  1. Easy access to a loan with the Lowest Interest Rate:

A significant advantage of having a Good Credit Score is that the chances of you getting a loan from the lender at a minimum interest rate increases. It is because a lender on seeing your Good Credit Score will consider you ‘Creditworthy.

  1. Improvement in loan eligibility:

When you have a Good Credit Score it shows the lender that you have a good loan repayment history and therefore you are ‘Creditworthy’. A major reason for any financial institution to offer you the Best Loan in India at the lowest interest rate available.

  1. Get the Best Credit Card in India:

Like loans you need to have Good Credit Score to have a greater chance to get the Best Credit India, that offers lifestyle-related benefits such as CASHBACK’ and ‘REWARD’ points. This is because possessing a Good Credit Score represents a reliable ‘Credit Behaviour’ and shows your ‘Creditworthiness’ to the lender.

 

Reasons for a Low Credit Score:

Credit score plays a very crucial role to determine your creditworthiness with lenders, as it reflects how likely you are capable to repay borrowed funds. A low Credit score may label you as a high-risk borrower, which can lead your loan application being rejected. It is important to understand the underlying reasons for a low Credit score to maintain a healthy score.

Here are some common factors that contribute to a low Credit score:

  1. Delayed Repayment of Loans and Credit Card Dues

Consistently missing or delaying the repayment of your EMls for loans or credit card balances can significantly impact your credit history, lowering your Credit score.

  1. High Credit Utilization

Using a large portion of your available credit limit (more than 30%) on a regular basis can signal to lenders about your financial eligibility. This can harm your credit score over time.

  1. Unbalanced Loan Mix

A poor mix of secured and unsecured loans can also affect your credit score. It’s advisable to have a higher proportion of secured loans (like home loans or mortgage loans) compared to unsecured loans (such as personal or business loans), as they are typically seen as less risky by lenders.

  1. Frequent Hard Inquiries

When you apply for multiple loans or credit cards in a short period, lenders make hard inquiries into your credit report. Each inquiry can lower your credit score, and various inquiries within a short period can address desperation for credit, which may make you appear to be a risky borrower.

Addressing these issues can help you improve your credit score and increase your chances of loan approval.

How do you download a PDF for a credit score check online?

To download your Credit report, follow these instructions.

  • Go to the EMI Calculator Credit Score page dashboard.
  • Click on the option ‘Check your Credit score’ to access your credit report online.
  • Then click on the ‘View My Report button.
  • Check your credit reports 
  • To save your Credit report to your device, tap on ‘Download Report.’

Credit Information Companies in India:

There are four companies in India providing credit information.

  • Experian Credit Information Company of India Private Limited
  • TransUnion Credit Limited (earlier known as – Credit Information Bureau (India) Limited)
  • CRIF High Mark
  • Equifax Credit Information Services Private Limited (ECIS)
What details do I need to check my Credit score?

To check your Credit score, you need to provide the following information:

  • Full Name
  • Personal Email Address
  • PAN Card Number
  • Registered Contact Number
Credit reports evaluate an individual's creditworthiness by analyzing their credit history, including loan repayments and any outstanding debts. They are essential for assessing financial behavior and managing credit risks, including free CIBIL scores and reports.

Credit reports are used to evaluate an individual’s creditworthiness by analyzing their credit history, including loan repayments and any outstanding debts. Lenders, banks, and financial institutions rely on these reports to decide on loan approvals, set credit limits, and establish interest rates. Credit reports are essential for assessing financial behavior and managing credit risks.

A soft inquiry can occur in several situations, such as:

  • When you check your Credit score.
  • When a landlord or employer reviews your credit score (with your consent).
  • When a lender assesses your credit score to pre-approve you for a loan or offer.

Yes, a hard inquiry can cause a slight temporary drop in your Credit score. When you apply for credit, the lender makes a hard inquiry to evaluate your creditworthiness, which can show up in your credit report and affect your score for a short time.

Why do I need a PAN card to check my Credit score?

Your PAN card serves as an official identification linked to your financial records and bank accounts, enabling a credit score check free online by PAN number.

No, they are not identical. The term “credit score” refers to the numerical rating provided by various credit agencies, such as TransUnion CIBIL, Experian, and Equifax. The specific score provided by TransUnion is known as your CIBIL score.

Lenders review your credit score to check your creditworthiness and determine your loan repayment ability. Your credit score helps them evaluate the risk involved in lending money to you, ensuring they make informed decisions.

No, soft inquiries do not impact your credit score. Since you’re not applying for credit, there is no negative effect. You can safely check your Credit score without worrying about lowering it, even if you’re considering applying for a loan or credit card.

A hard inquiry occurs when a lender checks your credit score and reports it as part of the loan or credit card application. This type of inquiry can temporarily decrease your credit score.

The impact of multiple credit cards depends on how you manage them. If you have several cards with high limits and you either overuse or underuse them, it can negatively affect your score. Responsible usage, however, can have a positive impact.