CIBIL Score: How to use credit report to plan finances? Here are 5 ways

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credit report, gives a peek into an overview of your entire credit history and financial behaviour. When you analyse your CIBIL report, you can make informed decisions and plan your finances in an effective way. For example, when 28-year-old Ravi Sharma got access to his CIBIL report, he discovered that his credit score was too poor to raise a loan on favourable terms.

Consequently, he changed his financial behaviour in order to improve the score in the near future. Evaluating creditworthiness: Your CIBIL report includes your credit score, which is a representation of your creditworthiness. A higher credit score shows lower credit risk and vice versa.

Banks, therefore, use this score to judge your creditworthiness when you apply for loans or credit cards. By knowing your credit score, you can gauge your likelihood of getting approved for credit and negotiate better loan terms. Find the areas for improvement: Reviewing your CIBIL report enables you to identify any negative factors affecting your credit score, such as late payments, high credit utilisation, or accounts in collections.

Addressing these issues can help improve your credit score over time and enhance your financial prospects. ALSO READ: CIBIL: Want to lease a car but have low credit score? 3 key things you should keep in mind Monitoring credit health: Monitoring your CIBIL report regularly enables you to keep track of your credit health and detect any inaccuracies or fraudulent activity. By promptly addressing errors, you can safeguard your financial reputation and prevent potential damage to your credit score.