There are many companies doing brisk business in the market at present. While some of these companies are present in a single field, there are others that span a variety of fields. Business with such companies can be done profitably only after the knowledge of their risk appetites, or their abilities to take risks. One way of doing so is to get access to the business’s credit report, which can be obtained through reputed credit agencies. Getting a credit score for an individual person involves a similar procedure.
Meaning of a Credit Score
This is a number used to evaluate the creditworthiness of an individual or a business. It may be a major loss for any business to give money to another individual or business with a low credit score. This is because the chances of the latter returning the money are very less. The credit score of a person ranges from 300 to 900, with a higher score meaning that the entity is financially stable. Of course, by finding out how to check credit score online, an individual or business will feel very secure.
Ways to Check Credit Score
Sound financial decisions can be taken with knowledge of credit scores. However, it is important to know that every time the score is determined, it lowers the score. However, this happens when a lender is checking the score, and not otherwise. Therefore, very frequent and unnecessary checks for the sake of curiosity must be avoided. Here are the different ways to get the checks done:
a)Banks – There are certain banks that also carry out credit checks these days. Some of them charge a fee and others do it without any charges.
b)Check with Credit Bureaus – According to RBI (Reserve Bank of India), every credit bureau needs to give an individual’s credit score for free at least once a year. After this, it can either be checked online by mailing them or on their official website.
c)Third Party Portals – There are many financial websites that are able to provide credit scores for free the entire year. Checks can be made innumerable times.
Giving Personal Data
For third party financial websites, it becomes necessary to give important personal data such as:
- Date of Birth
- PAN Number
- Employment Details
- Mobile Number
Based on the above information, details are pulled out from the credit bureau and displayed in front of the customers on the screen. Care must be taken to give information to a reputed third party website. Over time, a large number of such websites are coming up in India, and customers must find out about them before submitting data. There is no need to worry about the reputed websites since they tie-up with one of the 4 major credit bureaus.
Advantages of Checking Credit Scores on Third-Party Websites
2)Very small process
3)Getting scores from credit bureaus more than once a year will cost a certain amount, but third-party websites will provide them free of cost
Individuals may find that their credit scores vary from one bureau to another. Reasons for the same as follows:
1)Every bureau has its own method of calculating the credit score
2)The lender may not be reporting to a specific bureau at all
Businesses can also receive free credit scores by contacting the major credit bureaus. This helps them in the following ways:
1)Business with suppliers or customers with a poor history of payments are avoided
2)In case of a future weakening financial position, information can be received beforehand
Credit and Loans
A gold loan is the best way to meet urgent expenses quickly, and though it does impact the credit score if not paid back on time, it is extremely valuable in the short run. Most of all, it has to be paid back in a small period of time.
Getting such loans sanctioned is easy since very few documents are necessary. Third-party companies provide gold loans from different financial institutions, what the websites behaving like gold loan search engines. The loans can be granted only credit scores are eligible.
How to Become Eligible for Gold Loans
1)Customers must fall in the age bracket of 18-75 years
2)Professionals like farmers, traders, self-employed persons, and businessmen are eligible for gold loans
3)To get these loans, it is necessary only to submit KYC documents
Best Ways to Maintain Healthy Credit Scores in India
1)Keep Credit Utilization Low – Anyone who has two credit cards must not use the complete limit on both of them just because they are available. 30% is the approximate credit limit that should be used.
2)Timely Bill Payments – Payment of bills or EMIs has the highest impact on credit scores
3)Limit New Credit Applications – Frequent applications for credit cards will bring down credit scores.