Common Credit Report Myths Busted

Your credit report tells a lot more about you than just your creditworthiness. It shows your discipline, financial ground, attitude towards responsibility, and a lot more. In fact, public sector lenders such as SBI has also started considering your credit score as a parameter for assessing your job application.

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It’s really important that your credit report remains healthy. Unfortunately, many credit report myths are misguiding. Some of these are:

1. Checking your Credit Report Affects in Negatively

When a bank or some other financial institution asks a credit rating agency such as CIBIL for your credit report then it can have a negative impact on your score. However, when you as an individual apply for your credit report then it doesn’t affect it in any manner. If anything, this habit is actually good and highly recommended as it helps you take appropriate steps if you notice an anomaly in your credit report.

2. All Credit Bureaus Provides the Same Credit Report

There are 4 major credit rating bureaus in India- CIBIL, Experian, High Mark, and Equifax. They all maintain and provide the credit reports of Indian individuals. However, they all use different formulas for credit score calculation, and the way they present your credit information can also vary significantly.

3. Using Credit Cards Frequently Improves Credit Score Faster

Building credit score takes time. If you pay your bills and EMIs on time then you can get a boost in your credit score, but it can easily take months. Using credit cards excessively, on the other hand, won’t facilitate the process but actually do more harm than good. This is because high credit utilization is detrimental to your credit score.