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Experian Credit Report and Credit Score - How is it Beneficial? & FAQs
Experian is one among the SEBI and RBI approved credit rating agencies. Similar to the other credit rating agencies, Experian stores consumer information in its repository and retrieves them into a report whenever an enquiry arises. Know more about the agency here:
Experian Credit Information Report (Experian CIR) is the collection of information such as credit/loan history, identity information, credit accounts, credit cards, loans, payments, and bank enquiries. All the information provided by the member institutions of Experian will be made available in the Experian CIR. It includes all recorded credit information for any consumer such as type of borrowing, date of the loan, outstanding balance, payment history, and default payments if any.
The report also covers the information of when a lender made an enquiry about a customer. Information about the applicant’s previous details of credit applications such as the amount requested and the type of credit facility applied for.
Experian credit score is a numeric summary derived based on a consumer’s credit history of existing and previous loans/credits taken and the enquiries received from banks and financial institutions. In addition to all the information available on Experian CIR, you can also find this three-digit credit score that represents the entire report. A higher score states that you are good to get a new credit facility; makes it more favourable for lenders to trust you with their money. A lower score can be improved if repayments are made on time.
Experian compiles all your credit-related information and prepares a report that is beneficial for banks and financial institutions to understand your creditworthiness. When consumers access the report, they can figure out their score and the credit amount they can expect from lenders based on their score. If their score is low, they can work on building their score up and postpone their large purchases until their score gets better. Apart from this, consumers can also check for errors and get them rectified before they apply for a credit facility. This way, unnecessary confusions on the lenders’ end can be avoided.
Banks and financial institutions are committed to sharing consumer information with Experian on a monthly basis. Further, the day of the month on which they share data varies with institutions. The Experian CIR gets updated as soon as banks/financial institutions send data to the database.
Checking your credit score can let you know how feasible it is for you to get credit facilities for your big purchases such as car and house. If you know that you have a good credit score, you can deal with the bank/finance institute with confidence and get away with a loan, credit card, or car insurance premium having a favourable interest rate. In another case, you may find some errors in the report that is hindering your score. You can talk to the authorities about such errors and get it corrected before it gets too late.
You can check the credit report once in 3-6 months so the care you have taken to pay the bills on time during this period will successfully reflect in your credit report. This will, in turn, make the necessary changes in the credit score as well.