There are no free lunches. We have heard this idiom umpteen times. However, can there be an exception to the fact? As the understanding on importance of credit profile has grown, many providers have started to extend free credit report and credit score to individuals. But the question is: Can one really trust these?
Let us look at the factors that one should consider before extending any personal detail to any such provider:
1. Details being asked
This is the most important factor that you should keep in mind. If the provider is asking for credit card details or bank details, please refrain from seeking any report from them. You do not need to provide any such detail to them. What you need to provide is your personal contact details, PAN number and maybe answer some authentication questions. These authentication questions shall be based on your historic borrowing only and will be very generic. No detail on login IDs or password for any of your accounts should be asked.
2. Will obtaining report from a particular provider help you
As per a directive from the Reserve Bank of India, all four credit bureaus have started extending credit report and credit score free of cost since Jan 2017. While the process of obtaining it may be more cumbersome in case of the bureaus than the providers, the fact is that you can obtain one report at zero cost once a year. So if you are seeking it from a provider, please check if only the report is being extended or any analysis, explanation or detail that will help you decipher the report is also being given along with.
3. Credit bureau that they are attached with
You should be able to know the name of the credit bureau from where the score and report is being provided. The four bureaus in India are CIBIL, Equifax, Experian and Crif Highmark. If the score being given is not from these bureaus, then it will not make any sense to you. In case you are being asked questions about defaults, then in all likelyhood the score is not the one calculated by these bureaus.
4. Authenticity of the website
Surf the site of the provider before extending any personal detail. The first thing to check is the https sign in the beginning of the URL. In case the same is missing, refrain from furnishing any detail since the site will be susceptible to hacking and fraud. You can also find a lock sign just on the extreme left part of the URL window.
5. Business model of the provider of report
The provider of the free credit report and score should not be in any other field than that of finance. There are limitation on the businesses that can have access to the credit bureau reports. In case the provider’s business model is in a domain other than banking and credit, there are all the reasons for you to be suspecting the intent. Seeking report along with the analytics from the professionals of credit repair will be an even better idea since their understanding and analysis would give complete insight into the current credit profile.
There has been an influx in the number of entities providing free report and score after the RBI directed the credit bureaus to provide a report free of cost to all once in a year. While on one hand it has become quite easy for you to obtain these reports, on the other hand, seeking just the report and score may not be of much benefit. Therefore, you will have to have complete clarity on the objective. The reason for you to get a report from one of these providers should be to get more than just the report. But before applying for the free credit report and score, you must check on the above points.
(By Arun Ramamurthy, Director & Co-Founder of Credit Sudhaar)