All About Credit Scores
Business Today|May 01, 2022
A Healthy Credit Score Is A Barometer Of Your Financial Health. Here's What You Need To Keep In Mind
Teena Jain Kaushal
All About Credit Scores

PRAPHUL KUMAR was in for the shock of his life. While casually checking his credit score one day, he saw it at a low 650, instead of his usual score of 870. That set alarm bells ringing. “I dug in and read through the credit report, and found there are loans running [in my name]. I never applied for these loans. They were given without my consent and knowledge. My personal details such as date of birth and address were also not valid,” says the 33-year-old Pune-based businessman, adding that his PAN card details were used to obtain the loan. The amounts were small—₹5,000 and ₹56,000— but they hit his credit score, and impacted his credit profile.

Kumar isn’t alone. Bollywood actors Rajkumar Rao and Sunny Leone also tweeted that their PAN details were used by a third party to take loans of small amounts up to ₹2,500.

These incidents of identity theft indicate why it’s necessary to keep a close tab on one’s financial health. An easy way of doing it is by checking your credit score regularly. But what is a credit score? How do credit bureaus have so much sensitive data on you? And what is there in your credit score report? Let’s take a look.

The Magic Number

A credit score is a three-digit number assigned to an individual on a scale of 300-900 points. It is based on the unique algorithm of each bureau, with a score of 750 or above considered good. Credit bureaus score you primarily on six factors (see 6 Factors that Decide Your Credit Score).

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