How To Apply For Equifax Credit Score

How to apply for Equifax Credit Score

You have been dreaming about your vacation for long and have finally decided to apply for a personal loan to help you pay for that dream. You have done your research on the best interest rates and are sure of availing an offer from a particular lender. The joyous day has arrived, you go to the lender and apply with all the required documentation. You wait. Now comes the shocker —you come to know that you are denied the loan because of your credit score. Sounds familiar? Read on to know what is a credit score, who computes it, probable reasons for loan rejection, what makes for a good Equifax credit score, and how to apply for it.

The RBI has authorized companies which have registered under the Credit Information Companies (Regulation) Act of 2005 to provide a credit rating or a credit score based on past performances. The individuals’ credit activity is reported to the bureaus by various member banks and credit institutions, including information on the payments on all of their loan accounts and credit cards, their credit limit, the age and number of their credit accounts, status of these accounts, etc.

Equifax is one of the premier credit information bureaus in India. CIBIL™ and Experian are the other large players operating in India. Lenders are required to submit every customer’s credit-related data to all the 3 bureaus operating in India.

What is Equifax Credit Score?

A credit score—also known as a credit rating—is a 3-digit number between 300-900 that gives potential lenders a snapshot of your credit health. The higher your score, the better your financial health is. Your Equifax credit score is an indicator of your credit worthiness. To put it in simple terms, it impacts your ability to borrow and take fresh credit from lenders.

A credit score is calculated on the basis of several factors; but most importantly, your repayment history is taken into account. A low credit score gives a warning signal to the lenders about your repayment behavior.

How is the credit score calculated?

Your credit score is calculated based on several factors including:

Your repayment history - The most important factor. Keep in mind that even a few delayed or missed or incomplete payments can decrease your score and impact your ability to get credit later.

The number, type and age of your credit accounts - If you have loan accounts, it signifies that you have been judged creditworthy by multiple lenders. If you make your repayments on time on these accounts, it has a positive impact on your score. At the same time, too many might credit accounts without an equivalent income means that you have heavy loan obligations and lenders will keep that in mind when deciding whether to approve your application. Optimize the number of credit accounts you have so that you have a healthier credit profile.

Lenders also like to see a long history of credit repayments. That is why it is better to close newer credit cards than to close an old one. Having a number of old credit accounts helps your credit score.

The bureaus compute your credit score based on data shared by the lenders—banks, NBFCs and others—with them. The credit agencies receive details on every credit transaction you have entered into within the banking system, including your EMI history, every loan/credit card application you have made, and information on whether it has been approved or rejected. The agencies also receive information on any delayed, missed payments, or incomplete/partial payments. While arriving at your credit score, credit bureaus do not take into account your assets or investments of any kind or any other noncredit-related financial transactions.

How do lenders use the Equifax Credit Score?

Your Equifax score is indicative of much credit-worthy you are—whether you are a high-risk customer and are likely to default—by providing an insight into your credit behavior, as a credit score is arrived based on your past pattern of credit usage and loan repayment behavior. A high credit score means that you will have faster access to credit and on much better terms as it indicates a healthy credit behavior.

How does having a good Equifax Score help?

Your credit score is seen as a direct indicator of your credit health. The number of loans you have taken, types of loan accounts—whether it is secured or unsecured or a combination of both—outstanding debt, and the length of your credit history play a major role in determining your Equifax score. Lenders are generally predisposed to lend to those who have a high Equifax score. Just make sure you maintain a good track record backed by a history of timely repayment behavior and lenders will be likely to lend to you.

You should be absolutely sure of your credit score before you apply for a loan or credit card of any kind. If your credit score is low, build your score to better your chances for approval. Improving your credit rating helps you get loans at much better rates from lenders. A good Equifax score also helps you access offers from multiple lenders, giving you the opportunity to choose the best deal.

How to apply for Equifax Score?

It is simple to access your Equifax credit information report and score. You need to fill the Credit Report Request Form and self-attest the identity and address proof. You can submit your valid voter ID card, passport, PAN card, driving license or Aadhar card for identity proof. For address proof, you can submit either landline/mobile bill, electricity bill, gas utility bill or credit card/bank statement, ration card, driving license or Registered Rent Agreement along with Electricity/Landline/Mobile copy in the name of landlord. You need to send these documents, along with the requisite payment in the form of a demand draft, to the address mentioned on the Equifax website.

Once you do this, you will receive your credit report containing your credit score within 7 working days. This helps prevent identity theft and fraud, as well as helps you to plan your finances in an informed way. Keeping abreast of your credit score also helps you to improve on your score if its low, and lead a better, stress-free life.

Need help in accessing your Equifax Score?

Credit scores are a relatively new concept in India but have been widely in use in other countries. If you think you need help with accessing and understanding your Equifax credit report, and improving your Equifax score if required, CreditMantri can help you. CreditMantri provides online analysis and actionable insights to help increase your score. It will also obtain your credit score at no cost to you, and offers a free credit health check to help you become loan-eligible in the most efficient and optimal way.