Understanding your credit report isn’t as complicated as it may sound. These two words “credit report” hold an abundance of value when it comes to your financial future. Your credit report encompasses details of your entire credit activity and history. It contains crucial information about your loans, credit cards and how punctual you are with your payments.
You can access your credit report via any of the 4 credit bureaus i.e. Experian, CIBIL, CRIF & Equifax.
Your credit report contains numerous sections holding varied categories of information.
Starting with your Credit Score which ranges between 300-900 and is used to determine your loan eligibility and creditworthiness. A score above 750 is considered excellent while below 550 is considered poor.
Your credit report also has a section of your personal and account information and also contains details such as type of loans, loan amount and month-wise data of your loan accounts up to 3 years.
Another crucial section of your credit report is the DPD or “Days Past Dues” which is a detailed record of the payment timelines for your various accounts. “XXX” means that the bank has not reported the information to the credit bureau, while “000” indicates that you have not defaulted. Anything other than these two may imply that you have defaulted to pay your dues.
This is followed by the enquiry information section; a credit enquiry is made when you or another party wants access to your credit report. A soft enquiry does not affect your credit score and may include enquiries made by you, your existing creditor or a business. On the other hand, a hard enquiry can seriously affect your credit score and are usually made by a potential creditor with whom you may have applied for credit. Too many credit enquiries can affect your credit health tremendously.
Lastly, your credit report also contains a remarks section, these remarks indicate the current state of all your credit accounts.
Here’s what they mean:
- Settled:
This indicates that you have settled a loan by partly paying the dues. Only full payment of the dues can help you clear this remark.
- Written Off:
These remarks indicate that you have not been able to pay your dues for more than 180 days. Such a remark can seriously affect your credit score.
- Post Write Off Settled:
This indicates that you have settled the dues for your credit which had been written off. A settlement of this sort can decrease your chances of getting a loan in the future.
-Wilful Default:
A Wilful default is when a person does not pay the loan amount despite having the ability to do so. A wilful defaulter can also indicate a person who uses the finance provided to them by the lender for a purpose other than what was availed to them.
-Closed:
This remark indicates that you have completely paid off your loan amount and have not defaulted.
All in all, having an understanding of what your credit report means is extremely easy and essential as it helps you increase your credit score and plan your finances better.