The importance of a good credit score is undebatable just like the need for credit in modern day life. As we have said before, the need for credit can pop up at any time in the form of an emergency or it may be a planned need for which your existing savings do not prove sufficient.
And the basic need for any credit is a good credit score.
For the uninitiated, credit score is nothing but an expression of your creditworthiness in the form of numbers. It is assigned by the credit bureaus in the range of 300-900. The higher credit score represents higher level of creditworthiness. To get any form of credit at favorable terms, i.e. loan or a credit card, a credit score higher than 700-750 is absolutely essential.
How Do You Check Your Credit Score?
Credit score has gained popularity in the recent times. A survey conducted by CreditMantri in 2018 revealed that 64% of the respondents check their credit score at least once in 6 months or earlier than that. And 25% of the respondents said that they check their credit score when they apply for a loan/credit card.
On the other hand, there are a many more who are confused about where they can check their credit score.
Check Credit Score Directly With the Credit Bureaus
The RBI has made it very easy for you to check your credit score. As per their mandate, you are allowed to check your credit score and credit report with any of the credit bureaus free of cost. This is, however, restricted to 1 report per year. So you can check your credit score on the websites or the apps of the credit bureaus. All you need is your PAN number.
Here, we would like to tell you that each bureau follows their own methods of computing a credit score, hence your credit score may vary between the bureaus. Unless there is a huge variation, it should not be a matter of concern for the individual, as banks/financial institutions are equipped with the knowledge to interpret scores from different credit bureaus.
Check Credit Score With Fintech Companies
While the credit bureaus allow you to check your credit score free of cost only once a year, you could check your credit score with fintech companies like us as often as you like. And yes, it is always free of cost! In addition to your credit score, you could also get an in-depth analysis of your credit score in the form of a credit report from us. This could help you identify your problem areas and work on them.
Why Should You Check Your Credit Score?
A good credit score is a basic necessity in the world of credit. So, it is natural for individuals to try to improve their credit score or know where they stand.
Credit score is not a static number which remains the same all through the credit history of an individual. It is a dynamic entity which changes depending upon your actions related to credit. While continuous stream of prompt payments can pull your credit score up, missed payments or defaults will pull it down.
And to know where you stand on the creditworthiness scale (credit score), checking your credit score is the only way available to you. Did you know there are many advantages of checking your credit score?
We list some of them here:
- Gives you an opportunity to better your credit score
- Helps you to be better prepared while approaching your lenders
- Enables you to get loans on better terms and conditions
- Gives you the power to negotiate with your lenders
- Helps you identify errors and get them corrected on time
- Lessen the number of hard inquiries
With the knowledge of advantages of knowing your credit score, we come to the point of how often you should check your credit score.
Additional Reading: Advantages of a good credit score
How often should you check your credit score?
As we have learned earlier, you can check your credit score for free any number of times with us or any other fintech websites.
But what is the right frequency at which you should ideally check your credit score?
Ideally you should check your credit score anytime in a period of 3-6 months. However, if you like to check your credit score earlier than that, it should be fine. You do not lose anything by checking your credit score more frequently.
However, it is good to make it a routine to check your credit score at least once in a time period of 3-6 months because only when you are in constant touch with your credit score, you would be able to notice any kind of errors that may come up in your report.
Additional Reading: What are the common credit report errors that you should be aware of?
It becomes even more important to frequently check your credit score when you have a low credit score and are looking to improve it. When you check your credit score more often, you would be in a position to monitor your progress better and take required actions to build up your credit score.
Improvements on your credit score do not happen overnight. Every time you make a payment, it doesn’t show up on your credit report the next day and increases your score. Lenders generally follow a schedule of reporting to the credit bureaus, so you would have to wait till then and moreover, lenders and bureaus look for consistency in prompt payments rather than one or two payments on time.
Also if you are looking to apply for a loan in the near future, you should start monitoring your scores at least 6 months before your application so that you have enough time to build up your credit score and get good deals on your loan/credit card application. In this case, you may be required to check your credit score every month to see your progress.
Even if you are not looking to apply for a loan, it is good to constantly monitor your credit score so that you can be aware of any changes in your credit score or quickly be able to spot errors, if any.
Is Getting a Free Credit Score Safe?
If you are monitoring your credit score frequently, you would do so through a fintech website like ours. Many of you may even be wondering if it is safe to do so and if it will affect your credit score.
We would like to reassure you that it is perfectly safe to check your credit scores with us or other fintech sites, as that is considered as a soft inquiry and does not affect your credit score in any way.
However, make sure that the website over which you are checking your score is authorized by the credit bureau to share scores with you, follows a system of sound verification and does not ask for any other sensitive information like your bank account number and/or passwords for checking your credit score.
We would like to conclude by advising you to be proactive about your credit score and take steps to bring it up so that you can remain credit healthy always.