Top three reasons why you should consider reviewing your credit report

Top three reasons why you should consider reviewing your credit report

Mutual Funds
by 5paisa Research Team Last Updated: 2022-09-26T12:58:17+05:30

Lenders use your credit report to assess your credit health. Here are a few reasons why you should check your credit report. 

We have probably heard of the CIBIL score or CIBIL report. So, what exactly is CIBIL? Credit Information Bureau (India) Limited (CIBIL) compiles the loans obtained and payments paid by the person. This aids in analysing credit risk and determining an interest rate.

A credit report is supplied by CIBIL or any other agency of this type. So, here are some of the reasons why you should consider monitoring your credit report on a regular basis.

Maintain a good credit score

Your credit score might assist you to receive the required loan amount with competitive interest rates. So, if you ever need a loan, having a decent credit score is essential. What should your credit score be then? You must have a credit score of at least 700. A credit score of 700 or more is typically regarded to be good. So, examining your report on a regular basis can help you maintain your credit score, which will allow you to obtain loans at lower interest rates.

Understand your credit health

You can better comprehend your position regarding your credit health by occasionally reviewing your credit report. You may use this to see how many loans are outstanding in your name and whether or not you have any late payments. This will assist you in taking efforts to enhance your credit score and, as a result, your credit health.

Manage debt

Taking on more debt than you can handle is a recipe for financial disaster. As a result, it is critical to managing your debt in such a manner that it is no longer an emotional and financial burden on you. So, examining your credit report on a regular basis can help you realise whether debts should be foreclosed immediately by lump sum payment or reduced by increasing EMI payments.

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