Top risks if you do not review your credit report 

Good credit score has become a financial necessity today. Generally, lenders consider credit scores of 750 and above as good credit score and those having such scores have a higher probability of loan and credit card approval.

Many lenders have also started factoring credit scores while fixing interest rates, and some top corporates have started to consider it while evaluating job applicants.

However, most people do not realise the importance of their credit scores and credit reports until their loan or credit card applications get rejected for having a poor credit score. Apart from maintaining a healthy credit behavior, fetching your credit report at regular intervals would also motivate you to maintain financial discipline and improve your credit score.

Remain unaware of your creditworthiness: Lenders and credit card issuers often use credit scores as the first filter while processing loans and credit card applications. Many lenders have also started using credit scores to price their loan products.

Loan applicants with higher credit scores are increasingly offered loans at lower interest rates. Without fetching your credit report, you will not have clarity about your current credit score and your creditworthiness. With your latest credit report at your disposal, you will able to take corrective steps to increase your credit score before making a loan or credit application.

Reduced credit score due to credit report errors: Credit reports can contain misinformation due to clerical errors made by credit bureaus or wrong information feeded by lenders or credit card issuers. As your credit score is calculated on the basis of information contained in the credit report, such errors can have a negative impact on your credit score and future loan eligibility.

Fetching your credit report at periodic intervals and verifying its details is the only way of detecting such errors. Contact your credit bureau and/or the lender on finding any wrong or outdated information in your credit report.

Identity theft will remain undetected: Identity theft occurs when a fraudster gets hold of your personal information to undertake fraudulent transactions or avail credit facilities in your name. As your credit report will list all your debt repayments, credit accounts and outstanding debt, fetching your credit report at periodic intervals will help you detect any unauthorised loan or credit card transactions carried out in your name.

Won’t receive customised credit offers based on your credit score: Generally, people first apply for a credit card or a loan and then the lender or the credit card issuer fetches your credit report to evaluate your creditworthiness and process your application. However, the advent of the online loan and credit card marketplace has reversed this process.

Now, whenever you fetch your credit report from an online marketplace, they analyse your credit report based on the credit score benchmarks set by various lenders and forward you the various loan and credit card offers available on your credit score. This will get you a good idea about your current creditworthiness and help you in selecting or negotiating with your future lenders.

The customised offers sent through the online marketplaces may very well beat others in terms of loan features and processing time.

Currently, all four credit bureaus of India — CIBIL Transunion, Experian, Equifax, and CRIF High Mark — have their own scoring parameters and may register a different score for the same person and the same set of credit information.

Hence, ensure to fetch your free credit report from each of these credit bureaus, at least once in a year. Alternatively, you can visit various online lending marketplaces to get your free credit report and their monthly updates.