These days, almost everyone owns at least one credit card. Their repayment habits on the card often play a significant role in establishing their stand in front of present and future lenders and establishing one’s financial credibility. This makes it essential for an individual to know how to check credit score after they know how to get approved for credit card and do so even when they are not planning to apply for credit.
After you apply for a credit card and receive it, regular checking of your credit card score allows you to identify any potential fraud or malpractice in your credit card and fix it at the earliest. Ideally, you should check your credit score once every month. This article will guide you through all that you need to know about checking your credit card score.
- Know The Credit Card Issuing Authority
- Know Which Report to Check
- Look for Credit Score In Credit Report
- Check Credit Score Online
- Check Credit Score Implication
- The Final Thing to Do After Checking Your Score
Know The Credit Card Issuing Authority
The Reserve Bank of India regulates and looks into all the activities of banks, including credit card issuance and maintenance. Most rules pertaining to credit cards holds true across banks and are bound by the regulations laid by RBI. From time to time, RBI makes changes in credit card related policies and informs all the stakeholders of the same.
A recent example in this regard is that of RBI notifying credit card issuing banks to give an additional three days of grace period to all credit cardholders to avoid a bill payment default. Similar notices and reports are also sent to credit card holders to ensure that there is no discrepancy in their part. As the credit card issuing authority, RBI ensures that there is no shortcoming from either the customer or the issuing bank.
Know Which Report to Check
A common misconception around the credit score is the fact that people often tend to confuse it with a credit report. A credit report is an in-depth account of all your finances and contains details of your open and recently closed account, loans, current balance, etc. It is here that you will see your credit card payment history which will clearly highlight if you have paid your past dues on time or how long these payments were delayed by.
This report is exhaustive, and any charge-off, judgements against you, and inquiries made by lenders (usually happens when you apply for credit) are also shown. That way, reading this report will make you aware of any unwanted inquiries and act on them.
Look for Credit Score In Credit Report
A credit score is a three-digit number in the range of 300 and 900 that is used to determine your financial discipline. It is like a shortcut proxy for your credit report and tells a potential lender about the overall health of your report. This information helps them decide whether they should approve your credit card, mortgage, or personal loan.
Check Credit Score Online
All Indian credit card issuing banks offer the facility of checking one’s credit card score directly on the bank’s website. A simple login to the credit card section of the net banking page will tell you your credit card score.
Check Credit Score Implication
Considering that the credit score is a measure of your creditworthiness and determines your chances of getting credit, it is vital to understand the meaning of the different numbers that you may get in your credit score.
Credit Score of Less Than 549
Having your credit score in the range of 300 to 549 suggests that you have defaulted credit card bill payment on multiple instances. This labels you as an irresponsible borrower as it is nearly impossible to have such a score with one missed payment. Most banks and money lending organizations are sceptical about lending credit to people with such a score.
Also understand that in one situation, your credit score will show a non-numerical value of NA or NH. This is something you will see immediately after receiving your card and from the moment you make your first transaction (and subsequent repayment) on the card, this should not be your credit score. If you see this, even after making transactions on your card, reach out to the credit card issuer immediately.
Being an Average Credit Scorer
Most banks see credit scores in the range of 500 to 649 as ‘average’, and with such a score, you may or may not get the loan that you are hoping for. For people with a credit score in this range, it is usually other factors that decide whether they will be sanctioned a loan or not. If you find your credit score is in this range, you may want to read your credit report in detail to figure out ways of improving the score.
When your Credit Score is Between 650 and 749
This is a good credit score, and most banks will give you a loan or mortgage with this. However, you must realize that while having a score between 650 and 749 will get you the credit you want, you may not be in a position to negotiate a favourable deal with the bank.
Credit Score of 750 and Above
A credit score of more than 750 implies that you have been exceptionally regular with your payments and are a good borrower. Not only does this assure you of getting the credit, but most banks offer the least interest rates to such people.
The Final Thing to Do After Checking Your Score
By now, you are aware of how to check your score and understand the meaning of the three digits that you see. The next and final step is acting on it. Monitoring it every month will allow you to identify any sudden dip and bring to light errors made by credit agencies in computing your credit score.
Timely notification of such errors allows rectification, thereby preventing it from taking a toll on your overall score. Moreover, being familiar with your credit score will allow you to gauge your chances of getting a loan, and that will enable you to plan your finances more efficiently.
Thus, by now, you are aware of the importance of checking your credit score and know how to do it. You are also aware of what the different scores mean. All that remains is you making a conscious effort to keep a regular check on it and improve your overall financial health.