All You Need to Know About Experian Credit Score

The Experian score is a credit score that indicates your creditworthiness. It has a major role to play when you apply for loans. Let us dig into the Experian score in detail.

Why Do Lenders Check Experian Credit Scores?

If you have ever applied for a loan, you must have noticed that the lender checks the Experian credit report as well as the score. The credit score and report have all the necessary details about your repayment behaviour.

A higher credit score is considered better and translates to better financial health. A high score builds trust and you can get loans at favourable terms. You can negotiate lower interest rates, longer tenures, and higher loan amounts.

The same is true for individuals as well as companies or organizations. Thus, you should always check your credit score by yourself before applying for a loan.

What is a Good Experian Credit Score? 

The Experian credit score range is from 300 to 900 and a higher score is considered better. A score of 700 and above is enough for most credit products. 

The detailed division of the Experian credit score range is explained in the table below -

Factors that Affect Experian Score

Now that you know what is Experian credit score, an Experian credit score range, and what is a good Experian credit score, you must have a fair idea about credit scores. Let us now try to understand about the factors that affect Experian score - 

Credit Repayment History

The credit repayment history is a gist of your payment behaviour, i.e. how you repay your EMIs and credit card bills. This is the biggest factor that affects your credit score.

Making timely payments will have a positive impact on your Experian credit score. Thus, always pay your EMIs and credit card bills in full within the due date.

Number of Enquiries

Whenever you apply for a loan, the lender checks your credit score and report. This is known as a ‘hard pull’ and it shows up in the ‘inquiry’ section of your Experian credit report. 

Having too many hard inquiries on your report negatively impacts your credit score. To avoid this, refrain from applying for too many loans or credit cards at the same time. 

Please note that when you check your score by yourself, it doesn’t show up in the ‘inquiry’ section. Referred to as soft pull, you can check your credit score as many times as you want without any consequences. 

Percentage of Unsecured Loans

An unsecured loan is a type of loan where you do not need to pledge any asset or collateral. All personal loans come under this category and thus have a higher interest rate. 

These loans are risky for lenders and too many of such loans on your Experian credit report will impact it negatively. That might, in turn, reduce your credit score. 

You must instead have a good mix of credit products on your credit report. Be mindful and have a healthy variety of secured and unsecured loans, as well as credit cards to build a good credit score. 

Errors in Experian Credit Report

Often there might be errors while the lenders or banks report your payments or loan statuses. These might affect your Experian credit report and score.

Consider checking your credit score and report regularly. In case you find any errors, raise a dispute instantly and get it rectified. 

Credit Utilization Ratio

Your credit utilization ratio refers to the percentage of credit you have utilized to the credit available to you. Keeping an eye on the set credit limit is extremely important and you should ideally maintain a CUR below 30%.

Having a high CUR may make you look excessively dependent on credit. A low credit utilization ratio helps improve your credit score.

Please note that requesting to increase your credit limit too often is also not advised. Every time you make such a request, the company will make a hard inquiry which will again show up in the Experian credit report.

Status of Old Loans 

Any old loans that have been ‘settled’ or are not closed negatively affect your credit score. 

If you have any such old loans, you may consider getting in touch with your lender. You can pay the dues so that the loan account can be closed.

Credit Age

The credit age is the duration of time that has passed since a credit account was first opened. A longer credit history allows for greater trust in you by the lender.

Keeping this in mind, be careful about closing old credit card accounts. Try to keep it active by making small purchases and paying the bills on time.

Details in an Experian Credit Report

The Experian Credit Report is a detailed document that displays an individual’s entire credit record and history. This report is usually availed by lenders such as banks and Non-Banking Financial Companies (NBFCs), or lenders before approving your loans. The details contained in an Experian credit report are as follows:

Account History

This section has details related to all the credit accounts such as the type of credit that was borrowed, name of the lender, account number, date the account was opened, most recent payment, amount of loan borrowed, current balance, and a monthly record of up to 3 years of repayment.

Personal Information

Information about the individual such as their name, address, and other identifying information including PAN number, date of birth, and so on is available in this section.

Credit Summary and History

This section contains details of all credit accounts the individual may have had in the past or even currently along with information about the balance. This includes information such as the type of loans availed, prior defaults if any, payment history with dates, and current balance.

Credit Enquiries

This section has information regarding the inquiries that have been made by third parties (other lenders) based on the number of credit applications made by the said individual. Information such as type of credit facility i.e., whether they are loans or credit cards, amount of loan, credit limit, etc. is available in this section.

How to Check Experian Credit Score?

You can check your Experian credit score easily either online or offline. As mandated by the Reserve Bank of India (RBI), customers can avail of one free credit report from Experian every 12 months. For continued membership and updates about your Experian credit report and score, you have to make a payment of Rs.399 + GST.

Steps to Check Experian Credit Report and Score Online

You can check your Experian credit score for free by yourself. Here are the steps you can follow to do the same -

STEP-1: Go to the official Experian website and click on the ‘Free Credit Score’ button on the top left. Click on ‘Register Now’.

STEP-2: On the next screen, enter your mobile number and click on the ‘Send OTP’ button.

STEP-3: Enter the 6-digit OTP on the next screen and click on ‘Verify’.

STEP-4: On the next screen, fill in your details like your name, email ID, date of birth, etc. You can choose any ID type from your PAN card, Voter’s Card, Ration Card, Driving License, or Passport. Enter the number of the selected ID proof.

STEP-5: Finally, click on the declaration checkbox and click on ‘Get Report’.

STEP-6: Your Experian Credit Report will be shown on the screen. You can also download the report by clicking the ‘Download Report’ button.

Steps to Check Experian Credit Report and Score Offline

You can also check your Experian credit score using the offline process. Here are the steps you need to follow -

STEP-1: Download and print the Experian Credit Report request form from the official Experian website.

STEP-2: Attach a self-attested photocopy of an ID proof such as a PAN card, Aadhaar card, birth certificate, etc., along with an address proof such as an electricity bill, bank account statement, or Aadhaar card.

STEP-3: Pay the fee for the Experian credit report via a demand draft in favor of the Experian credit bureau and enclose it.

STEP-4: Send the documents to the Experian office in Mumbai, India.

Tips to Maintain a Good Experian Credit Score

A good Experian credit score can help you get loans at favourable terms and conditions. Improving your credit score takes consistent effort and patience. Here are a few tips and tricks to improve your Experian credit score - 

• Pay your ongoing EMIs and credit card bills on time

• If you are facing a financial crunch, consider paying the minimum due amount of your credit card bill within the due date

• Do not close credit cards that have been used for a significant amount of time

• Don’t take too many loans or credit cards

• In case a loan application is not approved, wait for some time before reapplying

• Monitor your Experian score regularly, and raise disputes to rectify any errors that your spot

• Diversify your credit by having a good mix of credit cards, secured, and unsecured loans

• Maintain a credit utilization ratio of under 30%

• Plan your loans in advance and calculate EMIs, so that they don’t become a burden later

• Try to not settle your loans

• Consult a financial planner if your credit score is too low 

How to Avail Loan with a Bad Experian Score

Generally, an Experian score lower than 600 is considered low and lenders refrain from giving loans in such scenarios. But that doesn’t mean you cannot get any type of loan with a bad Experian score. 

You can opt for any of the following options -

• Informal methods of borrowing such as online fundraisers or requesting the help of family or friends

• Try to apply for loans from Non-Banking Financial Companies (NBFCs)

• Explore P2P or peer-to-peer lending options

• Opt for a secured loan if you can provide collateral

• Apply with a guarantor or a co-signer as this will help distribute the loan burden 

Experian Credit Score vs CIBIL Credit Score

Various credit information bureaus generate credit scores, but the two most popular ones in India are Experian and CIBIL. Lenders may check the CIBIL, the Experian, or both scores depending on the type of credit product and their preferences. 

When you check your CIBIL and Experian scores, the score might not be the same. If you are wondering ‘why Experian and CIBIL score are different’, the reason lies in the difference in calculation models. Credit bureaus give importance to different factors that cause the difference in scores.

90% of Indian banks and lending companies use the CIBIL score majorly, but the Experian score is also commonly used by them. 

The Experian is one of the most commonly used credit scores in India. A good Experian credit report can help you in many ways to achieve your financial goals. Here are some ways in which a good credit score can help you - 

• Easier loan approvals
• Higher loan amounts
• Lower interest rates
• Negotiating a longer tenure
• Reduces the need for documentation
• Proves you as responsible and less risky 

You must check your credit score regularly and work towards improving your score. In case you have a low credit score, you can still opt for instant personal loans from Moneyview. At Moneyview, you can get loans from Rs.5,000 to Rs.10 Lakh with an Experian or CIBIL score of just 650.

To apply, visit our website or download the Moneyview loans app.