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Things to Look for in Your Credit Report

By Anuj Cariappa
Google Oneindia News

If you have applied for a loan or credit card, you must have heard about the term 'credit report'. A credit report summarizes how you have used the credit available to you and informs the lender about your financial health. Based on this report, the lender assesses your loan or credit card application. Therefore, in addition to monitoring the changes in your credit score, it is also important to read your credit report from time to time to identify errors and rectify them at the earliest. Here are some of the things that you should look for while checking your credit report:

Things to Look for in Your Credit Report

Account Details

Under this section, you will find the details related to your accounts- both active and closed. The lender uses this information to check your current debts and your capacity to handle more credit. Therefore, it is important to check that your loans and credit card account details are updated accurately. Any kind of error in your account details can negatively impact your credit score, which reduces your chances of getting a loan or credit card. In case you notice a new credit account that you did not apply for, you must immediately raise a complaint about the same with the concerned credit bureau.

Repayment Details

The repayment details capture whether you have timely repaid your credit card bills and loan EMIs. It contains the detailed repayment history of your active card and loan accounts. The lender uses this information to check your creditworthiness and to predict your future repayment behaviour. Hence, it is important to check ​whether ​any wrongful missed, late or partial payments are listed in your credit report. If you find such errors, it is best to get them rectified as soon as possible.

Credit Utilization Ratio

Credit utilization ratio (CUR) is one of the important factors that credit bureaus consider while calculating your credit score. It is the ratio of your credit limit utilized by you against your total credit limit. The lower your credit utilization ratio the better it is. To ensure that you maintain a good CUR, you should not max out your credit cards frequently, as it reflects that you are credit hungry. If you are not satisfied with your credit limit, you can request your card provider to increase the limit on your existing cards. You can also apply for a new card to increase the overall credit limit available to you. This will help you maintain a good credit utilization ratio, considering you do not increase your spends.

Credit Enquiries

Under this section, all the details about your credit enquiry, such as the date of the application, lender's name, etc., are captured. Whenever you apply for a loan or credit card, the lender requests the credit bureau for your credit report, such requests are known as 'hard enquiry'. Multiple hard enquiries in a short period of time can lower your credit score. You must try to avoid multiple hard enquiries and explore various options while applying for a credit card. Check your credit report for credit enquiries that you did not initiate. If you notice such kind of error, contact your card issuer and rectify it, as it can harm your credit score.

Personal Details

Apart from all the details related to your credit card, you should also check that your personal details are listed correctly. Usually, lenders check all the information listed on your credit report while assessing your loan or credit card application. Therefore, you should make sure that all the information that is mentioned in your credit report is correct as any kind of mismatch in personal information​​, can lead to the rejection of your application. ​

So, these were some of the few things which you must keep an eye on while checking your credit report. You should always check your credit report periodically. Doing so can help you identify the errors and get them rectified quickly, hence saving you from a reduced credit score.

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