From creating budgets to sticking to them, healthy financial practices are essential if you want to improve your financial standing in the future. However, financial habits and practices are not limited to a savings fund; they also expand to your credit behaviour. Paying credit bills on time is as essential as conducting regular credit score checks. In fact, you must do a credit score check every six months. 

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Surprised, right? You must be. Today, we will be telling you why conducting a credit score check every six months is essential. But before we do that, let us spare a moment to brush up on the basics. 

What is a Credit Score? 

A credit score is a numeric digit that highlights your credit behaviour. It ranges between 300-900 and is calculated by the credit bureaus in India on the basis of your credit behaviour. The credit bureaus in India compute this score on several factors, such as the credit you have acquired, the credit you have utilized and the time you took to repay the credit. 

What is a Bad and Good Credit Score, and What Does it Mean? 

As mentioned before, a credit score is a metric that analyses your credit behaviour. It deems where you stand on the credit line. A bad credit score highlights that you stand on the bottom end of this line, and you must make adjustments to improve your credit behaviour. Otherwise, you might find it hard to secure loans. 

Likewise, a good credit score signifies that you are doing good when your credit behaviour is concerned. It means you are paying your bills on time, handling your credit well and can be trusted by lending agencies. 

Credit Score Ranges: 

700 – 900 – Good Credit Score 

650 – 699 – Average 

600 – 649 – Doubtful 

< 600 – Requires Attention 

Why Doing a Credit Score Check Essential? 

Planning to secure a loan? Ensure that you have a good credit score. If your significant purchasing decisions rest on credit, any setback or rejection can significantly affect your plans and financial standing for the worse. A good credit score enhances your chances of securing a loan. A lending agency or bank would only offer you credit when it thinks that you are suitable, i.e., when they know you will be able to pay them back on time. As a credit score check reflects your credit behaviour, lending agencies can discern if you should be provided credit. 

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Apart from that, a credit score check gives you a clear picture of your own credit behaviour. You can see for yourself where you stand financially. If you heavily rely on credit for your payments, it is a red flag that you need to come to terms with. Relying heavily on credit is a big no for your financial health. A credit score check is a reflection of the fact that you need to change your ways if you want to improve your financial health in the long run. 

In addition, a high credit score check would make you eligible for several perks offered by banks and lending ages. These perks can include a lower interest rate and increased negotiating power. 

Frequent credit score checks can also help you identify any errors made in your credit score. Errors are not uncommon in credit reports. They need to be identified before they can be rectified. Thus, a credit score check would put you on the right path. 

Why six months?

Now know the several benefits and importance of conducting credit score checks. But do you know how often you should do a credit score check? 

The answer is six months. But why six months? Here’s Why: 

It usually takes around six months for your credit score to change. So, if you have been following all the steps to improve your credit score, it will take six months to reflect in your credit score. 

What Can you do to Improve your Credit Score? 

Here are some healthy financial habits that can help improve your credit score: 

1. Make it a habit to pay bills on time. 
2. Do not apply for multiple loans in a short window. 
3. Refrain from exhausting your credit limit. 
4. Prefer using a debit card instead of a credit card all the time. 
5. Maintain a financially healthy credit mix. 

Lastly, How to do a Credit Score Check? 

To begin with a credit score check, visit the CIBIL website. 

• Select ‘Get your Free Credit Score’
• Fill in KYC details
• Click ‘Proceed’
• You will now have your credit score sent to your mail

Conducting frequent credit score checks is one of the healthiest financial habits you can adopt to secure your financial future. So, what are you waiting for? If you haven’t conducted a credit score check yet, today is a good day to start. After all, as they say, it’s never too late to start.