Many banks and NBFCs offer personal loans instantly online with just minimum documents. Though personal loans are easily accessible, recent news on loan fraud has hit the headlines grabbing the public’s attention. With the increase in cyber crimes, loan frauds are a new concern. It occurs when someone takes a loan without your knowledge by hacking into your personal information, such as PAN and Aadhar Card. The only solution to avoid falling prey to loan fraud is to check your credit score and report frequently. Read more, as this article will guide you on how to check your credit score and how to prevent yourself from loan fraud.
Before going deeper, let’s first understand a credit score and its importance.
What is a Credit Score?
A credit score basically ranges from 300 to 900 representing your creditworthiness. Factors like payment history, length of credit, new credit, etc., play an essential role in determining your score. A score above 750 is typically considered good and represents that you can repay your loan on time. Before approving your loan application, lenders first check your score to determine if you have a good credit history.
Importance of Having a Credit Score
● Low-interest rates: You can quickly get personal loans at low-interest rates when you have a good credit score.
● Eligibility for loans: Since you have a high score, you will automatically become eligible for loans.
● Higher loan amount: You can also apply for increased loan amounts as you are considered a low-risk borrower if you have high scores.
● Quick approval of loan: There are high chances of your loan getting sanctioned when your credit rating is high.
● Adds additional value: You will be considered a credible borrower able to repay your loans on time.
Steps to Check Your Credit Score for Free
Many banks and NBFIs provide options for checking credit reports. Here are a few steps you can follow to check your credit score.
● Step 1: Visit the official website of the bank or lending institution and select “Check Credit Score.”
● Step 2: Enter the required personal information such as date of birth, email address, registered mobile number, and PAN.
● Step 3: Once you enter the OTP you received, you will get your credit score and report instantly.
● Step 4: If you find any unauthorized loans sanctioned in your name, report them immediately to the credit bureau and get them rectified.
How to Check If You are A Victim of Loan Fraud?
Here are two simple ways to check if someone has taken out a loan without your knowledge.
Check Your Credit Score and Credit Report
One of the easiest ways to check if you are a victim of loan fraud is by checking your credit report regularly. The credit report has general information such as your payment history, credit inquiries, loans taken under your name, etc. So, if you find any unauthorized loans taken under your name, they will be reflected in your report and ultimately affect your credit score. Hence, you must check your report at least once a year to identify potential threats immediately. If you want to check your credit score, you can use Buddy Score and get your report instantly.
Check Your Form 26A
Form 26A is your annual Income Tax Returns statement issued by the Income Tax Department, and it contains income tax records of all your financial transactions and tax payments made using your PAN card. Therefore, checking your Form 26A helps identify any suspicious activity early and report a dispute to rectify it.
How To Protect Yourself From Loan Fraud?
Sometimes, you might not even be aware that someone has taken a loan by misusing your documents until you take action to check it. Here are a few simple ways you can avoid getting into the trap of loan scams in the future.
● Do not enter confidential information such as your PAN Card or Aadhar Card details without checking the website’s authenticity.
● When you submit a photocopy of your PAN card or Aadhar Card, sign the document below with the date and state the purpose of presenting it as proof of identity.
● Do not enter your personal information on unknown websites, such as your full name and date of birth.
● Keep track of your credit score and credit report regularly.
Credit score also plays an essential role in deciding your credibility. You can quickly get low interest personal loans from Buddy Loan if you have a high score. Lastly, checking your credit score will help you identify potential threats or fraud beforehand.