Experian Credit Score: Understanding Experian CIR & Credit Score
A credit score is the basic test of your creditworthiness. It is usually calculated based on your financial history, credit mix, how you have been using the credit, and how diligent you are in making repayments. The information helps potential lenders determine how you manage to repay your credit obligations and decide whether to approve or reject your loan application.
Credit scores are calculated by credit bureaus. In India, there are four major credit bureaus: Experian, TransUnion CIBIL, Equifax, and CRIF High Mark. These credit bureaus acquire and maintain your credit details and help lenders understand how creditworthy you are.
This article will talk about Experian, a multinational credit reporting company that started in India in 2010.
Experian provides clients with both personal and business credit scores to help them measure their creditworthiness and help manage their credit activities more efficiently and effectively.
What is Experian Credit Score?
Experian credit score is a three-digit number that ranges from 300 and 850. The credit score represents your creditworthiness or your eligibility to get approval for a loan or a credit card. A high Experian credit score improves your chances of getting loan approvals at the best of loan terms because you are seen as a person with responsible credit behaviour and a low risk of default.
Why are Experian CIR and Credit Score Important?
The Experian Credit Score and Credit Information Report reveal your past credit history and creditworthiness to get a credit card or loan approval. If you have a high Experian score, your chances of loan approvals are higher. Moreover, a high Experian credit score helps you get a loan at a lower interest rate and better terms.
How to Get Your Experian Credit Report and Credit Score Online?
You can check your Experian credit score for free once every year. To check your Experian credit score online, follow these steps:
Step 1: Visit the Experian website.
Step 2: Click on the “Free Credit Report” button.
Step 3: Enter your personal details, such as your name, mobile number, and email address.
Step 4: Enter the OTP received on the mobile number shared above and click on “Get Credit Report.”
Step 5: Enter your identity details such as DOB, residential address, and Govt. approved ID card number (passport, driving license, PAN card, voter ID, etc.)
Step 6: After the information is verified, you may be asked for information on your loans and credit history.
Step 7: You will be redirected to a page generated by your credit score.
Step 8: You’ll also have an option to download your credit report.
How Your Experian Credit Score is Calculated?
Your Experian credit score, and your credit report, is calculated based on five major factors. These factors contribute to a different percentage of your final Experian score. They include:
Timely repayments on your credit cards and loans help your score and missed payments and defaults harm your score.
Your account balances, the amount of money you owe, and how much of your credit limit you have used impact your credit score.
Length of Credit History
The average age of your credit accounts has an impact on your credit score. The older the credit accounts, the higher is your creditworthiness.
New loan applications impact your credit score. A high number of new applications can harm your credit score.
The types of credit accounts you have impact your credit score. A good mix of secured and unsecured loans is good for your credit score.
How is Experian Credit Score Different from Score Provided by Other Bureaus?
Experian is part of the global Experian organisation with more than 30 years of experience in managing bureau data, adding intelligence to the data and delivering scoring solutions. The Experian score is calculated based on the credit information received from the bureau members like banks and financial organisations.
Your Experian credit score is determined by applying a statistical algorithm that uses past credit behaviour to predict future credit behaviour. This information may or may not be the same as the information available with other credit bureaus/credit information companies. Moreover, each credit bureaus uses different data samples and algorithms to calculate their credit scores, and they do not disclose this information in detail. Hence, credit scores provided by different credit bureaus may be a unique meaning.
How Can I Improve My Experian Credit Score?
It’s easy to improve your Experian credit score by taking the following steps:
- Make regular payments on your loans and credit cards.
- Do not apply for too many loans and credit cards within a short time.
- Ensure that your check your Experian credit report and credit score regularly. If you spot any errors or misinformation, raise a dispute with Experian.
- Keep your credit utilisation ratio below 30%.
What is an Experian Credit Information Report?
Experian Credit Information Report (CIR) is a detailed statement of your credit history – details of all your credit and debt accounts. This report also contains identity information, recent enquiries, credit cards, loans, and repayments.
How important is it to check my Experian CIR on a regular basis?
Checking your Experian credit report on a regular basis is important for two reasons:
- It helps you make an informed credit decision regarding big purchases, such as buying a car or a home. A high Experian credit score increases your chances of getting a loan approved at a low-interest rate.
- It helps you spot errors in advance on the credit report, if any. You can then raise a dispute with the credit bureau and get them rectified. If inaccurate information goes unchecked, it can harm your credit score and interfere with future loan approvals.
What information does Experian collect?
How is the collected information used?
Experian assimilates the information under the person’s name and uses it to create a person’s credit profile demonstrating their repayment behaviours.
Who uses the information collected by Experian?
The collected information is made available only to the bureau members (banks and financial institutions) who need access to this information for the purpose of making a lending decision.
How does Experian credit score affect my loan applications?
A high Experian credit score increases your chances of loan approval at the best loan terms. On the other hand, banks may reject your loan application if you have a poor Experian credit score.
Can I access my Experian credit report without the Experian credit score?
Yes, you can.