What’s in an Equifax report and how to improve credit score?

Your credit score determines your ability to get loans or mortgages and obtain an apartment through rental agreements in various financial aspects. Your creditworthiness determination depends on lenders seeing how you handle money through your score.

Equifax India operates as the credit bureau in India through its legal entity Equifax Credit Information Services Private Limited (ECIS) which holds a Reserve Bank of India (RBI) licence under the Credit Information Companies Act of 2005. Each banking institution along with NBFCs and other financing organisations sends Equifax their consumer credit information each monthly period.

Credit score

The three-digit credit score indicates your creditworthiness through values ranging between 300 and 900. Your credit score calculation includes various elements such as historical borrowing data along with how you repay loans as well as your overall credit management practices.

• A higher credit score of 750 and above indicates reduced credit risk so your applications for loans face better approval possibilities and can acquire more favourable interest rates.
• When your credit score drops lenders may choose to deny your loan application and possibly provide elevated interest rates.

The Equifax credit score derives from the information contained in your credit report that shows your loans along with credit card activity, repayment records and credit request history.

Steps to improve Equifax credit score

1. On-time payments: Paying EMIs and all monthly expenses remain crucial because late payments create substantial damage to your credit history.
2. Pay due amount: The overall credit score stays healthy through complete monthly payment of each total amount due.
3. Old credit accounts: The duration of your credit history gets shortened when you terminate old credit cards or loan accounts thus leading to lower credit scores.
4. Limit credit application: The process of applying for many loans or credit cards at once causes hard credit checks and results in score reduction.

Key features of an Equifax credit score

• Lenders use it to assess risks: Banks together with financial organisations determine their interest rate decisions by examining credit scores while also making loan approval choices based on scores.
• Track financial health: Your financial well-being becomes easier to monitor through knowledge of your credit score which enables you to improve your creditworthiness.

Factors that influence Equifax credit score

1. Repayment history: Your credit score improves through regular payment commitments while any missed payments will reduce it.
2. Credit utilisation: The ratio between your accessible credit and what you actually use reaches risk levels when it exceeds 30%. This can lead to damage to your credit score.
3. Credit mix: A favourable credit score results from mixing different types of loans which include unsecured credit such as credit cards and personal loans and secured credit such as home and vehicle loans.

In conclusion, checking your Equifax credit score through proper financial management remains essential to establish control over your funds. Your credit score will grow which will result in better loan conditions through monitoring your credit report and correcting errors and practicing credit responsibly.