Personal finance

5 Key Factors To Note While Reviewing Your Credit Report

Any incorrect data or errors related to loans or credit cards can harm your credit score

September 15, 2021 / 10:11 AM IST

Financial institutions evaluate the creditworthiness of loan and credit card applicants on the basis of the information listed in their credit report. Lenders further use this information to set the loan interest rate.

One of the simplest ways to understand your credit eligibility and position is to check your credit report and credit score at periodic intervals. Doing so would help identify inaccurate information, which may pull down your credit score.

Here is a checklist of the various sections that you should closely review while going through your credit report.

Credit accounts

Each of your active and recently closed credit accounts is listed under this section of credit report. Lenders pay close attention to this information while evaluating your creditworthiness. Therefore, make sure your loan and credit card account details are updated and reported accurately in the credit report. Any incorrect information or error can harm your credit score and have an adverse impact on your loan and credit card eligibility in the future.

Repayment history

This section lists the repayment history of your loan and credit cards. It also gives details of the months in which the repayments were made by the due date and those that were missed/delayed. The information contained in this section may be used by the lenders to assess and predict your credit repayment behaviour. Hence, you must check whether the repayment history has been accurately listed and updated in your credit report.

Personal details

This section captures your personal information, including your name, PAN, mobile number, communication address, etc. As lenders check your credit report while evaluating your loan or credit card application, any discrepancy in the information listed in your credit report and that mentioned in your credit application can dampen your chances of securing any form of credit, be it a loan or credit card.

Credit utilization ratio (CUR)

This is one of most crucial parameters factored in by the credit bureaus while calculating your credit score. CUR is the ratio of the total credit limit utilized by you. Banks prefer lending to those having credit utilization ratios within 30 percent. So, those who frequently breach this mark should ideally request their credit card issuer to either increase their credit limit or apply for another credit card. This way, your CUR will be contained, provided you do not increase your card spend.

Credit report enquiries

This section lists lender-initiated fetches of your credit report. Depending on the bureau, this section lists the name of the lender, date of the application, the type of credit facility applied for, etc.

Lenders check your credit report from the bureaus every time you apply for a loan or credit card. Such lender initiated requests are termed as ‘hard enquiries’, each of which gets listed in your credit report. It may even reduce your credit score by a few points. Hence, submitting multiple loan or credit card applications with lenders or credit card issuers within a short span can lead to a significant dip in your credit score.

Instead of making multiple loan or credit card applications with lenders within a short span, visit online financial marketplaces for comparing various loan and credit card options available on your credit score and other credit eligibility parameters. Credit report access by such platforms are considered as soft enquiries and they do not impact your credit score.

What if you spot any error in your credit report?

Report any inaccurate or incomplete information listed in your credit report to the concerned credit bureau or lender for rectification. You must also make it a habit to check your report at periodic intervals, at least once every three months. You may be able to pull out one free credit report every year from each of the four credit bureaus. Alternatively, access free credit reports with monthly refresh via online financial marketplaces.

Radhika Binani is Chief Product Officer,

–> Here is a checklist of the various sections that you should closely review while going through your credit report.


Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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