Can I Have More Than One Credit Score?

Credit Score is not just a general number, but it plays a huge role when the card issuers/lenders decide whether to approve or reject your credit/loan application. Financial experts often advise checking your own credit reports and scores frequently to keep track of them. Checking your credit score regularly also helps you understand your mistakes and improve your credit profile accordingly. If you frequently check your credit score on different websites/apps, you might have observed that your credit score sometimes varies by a few numbers. This leads to many confusions in an individual’s mind, such as: are these credit scores genuine? Is it possible to have more than one credit score, and so on. In this article, we will try to make all these things easier for you. keep reading to understand further

Is it Possible To Have More Than One Credit Score?

It might sound weird, but Yes, it is possible to have different credit scores at the same time. As discussed above, there are four major credit bureaus in India that calculate your credit scores on the basis of information collected by them from different lenders/card issuers. Generally, there are no major changes in the credit scores calculated by them, but the scores may vary by a few points. It is because different banks/card issuers provide your credit information to different bureaus. For example, if you are having 5 credit accounts, it is possible that four of them are being reported to all the bureaus, but one of them is only reported to Transunion CIBIL. Now, your CIBIL score would be calculated on the basis of five credit accounts, however, Experian and the other two bureaus will only consider the four accounts. This might be one of the reasons behind your varying credit scores.

Another reason may be the criteria for calculation by different credit bureaus. Though the major criteria are almost the same, different bureaus may have some additional criteria based on which your credit score is calculated. Moreover, the credit score range may also vary slightly. With a particular bureau, the maximum score may be 900 whereas, for some other bureaus, it may be 850.

The Four Major Credit Bureaus in India

Credit Bureaus are the credit information agencies that collect your credit/loan-related information from different card issuers/lenders and prepare a report of your creditworthiness. Your credit score is also calculated on the basis of the information mentioned in this report. The following are the four major and most popular credit bureaus in India:

  • TransUnion CIBIL: This is the most popular credit bureau in India and most of the card issuers/lenders/credit issuing companies provide the information of their customers to CIBIL. Moreover, the CIBIL score is considered by all the major card issuers and financial institutions in India. CIBIL collects credit information of individuals from different lenders and prepares detailed credit reports based on the same. The credit scores by CIBIL range between 300 and 900.
  • Experian: Experian India, established in 2006, is also one of the major bureaus in India. It gained the trust of millions of people very soon after its establishment and has also been awarded as one of the most innovative companies in the world. Experian collects the credit information of individuals as well as companies and prepares detailed credit reports.
  • Equifax: Equifax is the third most significant credit bureau in India, just after TransUnion CIBIL and Experian. Many financial institutions report their data to Equifax and the bureau prepares your credit reports based on the same.
  • CRIF Highmark: CRIF Highmark is also trusted by lakhs or institutions in India and is among the major credit bureaus. Though it is not as popular as CIBIL or Experian as of now, the accuracy provided by the bureau has become a trust factor for many financial institutions out there.

How To Maintain a Good Credit Score?

In order to build and maintain a good credit score, there are five major points that you need to keep in mind. These points are as follows:

  • Payment Behaviour: Your payment behavior plays the most significant role in building your credit history. 35% of your credit score depends on how you are at making your credit card payments. So, just make sure that you pay your credit card bills always on or before the payment due date and avoid carrying standing balances from month to month.
  • Credit Utilization Ratio: The credit Utilization Ratio, i.e. the ratio between your total credit limit and your used credit limit, is another important factor affecting your credit score. In order to maintain a good credit profile, you need to make sure that you don’t spend more than 30% of your total credit limit.
  • Average Age of Accounts: Average age of all your credit accounts also plays a role in building your credit score. The more the average age of your accounts is, the better the credit score. So, you should try closing credit accounts very often until it seems essential.
  • Credit Mix: Instead of having only one type of credit, it is advisable to maintain a good mix of different types of credit accounts, such as credit cards, loans, Buy Now Pay Later options, etc. This helps the lenders understand that the borrower is responsible enough to manage multiple accounts together.
  • Hard Inquiries: Hard Inquiry refers to the credit check made by credit card issuers or lenders before approving/rejecting your application. If you apply for credit cards/loans very often, your credit score may get affected in a negative way as the number of hard inquiries on your credit profile increases. So, whenever you apply for a credit card, wait for a few months before your next credit application.

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