3 min
14-April-2025
Your credit score is more than just a number—it’s a powerful financial tool that can shape your future. Whether you're applying for a loan, renting an apartment, or even landing a job, your credit score often plays a crucial role in the decision-making process. Monitoring your credit score regularly allows you to stay informed about your financial standing, detect any fraudulent activity early, and take proactive steps to improve or maintain your credit health. A strong credit score can unlock better interest rates, higher credit limits, and more favorable loan terms, saving you money in the long run. On the flip side, ignoring your credit can lead to unpleasant surprises, such as loan rejections or higher premiums. By keeping a close eye on your credit report and score, you not only gain financial confidence but also take control of your future. In short, monitoring your credit is smart, simple, and essential.
Positive impact on credit history
Successfully closing a LAS on time demonstrates responsible credit behaviour. This gets reflected in your credit report and may boost your credit score.
Improved credit utilisation ratio
Once the loan is closed, the outstanding debt associated with it is removed. This lowers your credit utilization ratio, which is a critical factor in credit scoring.
Potential short-term dip
In some cases, closing a loan account may lead to a temporary dip in your credit score, especially if it's one of your longer-standing credit accounts. Credit history length plays a role in scoring models.
Release of securities
Upon loan closure, the pledged securities are released back to you. This improves your net worth and financial flexibility, which indirectly benefits your credit profile.
Reduced credit mix
If the LAS was your only secured loan, closing it could impact your credit mix. A diverse mix of credit types (secured and unsecured) is generally favourable for your score.
Impact on future loan eligibility
A closed LAS with no defaults makes you appear more creditworthy. Lenders may view you as a low-risk borrower for future loans.
Confirmation of closure is key
Ensure you receive a no-dues certificate or loan closure confirmation. Inaccurate reporting by lenders can lead to discrepancies in your credit report.
Monitor your credit report
After closing the loan, check your credit report to ensure that the account is marked as "closed" and reflects the accurate status.
No prepayment penalty advantage
LAS typically doesn’t carry a prepayment penalty, so closing it early may not negatively impact your finances while still benefiting your credit profile.
Understanding these aspects helps you make informed decisions and maintain a healthy credit standing after closing a LAS.
Check with credit bureaus
Visit official websites of major credit bureaus like CIBIL, Experian, Equifax, or CRIF High Mark. Most offer one free credit report per year and options for regular updates.
Use free credit score platforms
Multiple financial websites and apps provide free access to credit scores and reports. Some platforms even offer monthly or real-time updates without impacting your score.
Subscribe to credit monitoring services
These are paid services that offer regular monitoring, alerts for any changes in your credit report, and detailed insights into what affects your score.
Banking and loan apps
Many banks and NBFCs now include credit score tracking features in their mobile apps or internet banking portals. These scores are often updated monthly and sourced from leading credit bureaus.
Review your credit report for accuracy
After your LAS is closed, download and review your credit report to ensure the account is marked as “Closed” or “Paid.” Incorrect information can hurt your score.
Set calendar reminders for periodic checks
Tracking your score every 2-3 months helps you stay aware of any sudden drops or changes, especially after closing a loan account.
Opt for email or SMS alerts
Many credit tracking platforms and banks offer alert systems for any changes in your credit report. These alerts help you act quickly in case of discrepancies.
Use personal finance apps
There are various personal finance apps available that often integrate credit score tracking as a feature. They also give insights and suggestions to improve your score.
Track score movement post-closure
It’s normal for your score to fluctuate slightly after closing a loan. Monitoring helps you understand trends and identify the right time for new credit applications.
Dispute errors immediately
If you find any discrepancies in your credit report after LAS closure, file a dispute with the credit bureau right away to avoid a long-term impact.
By consistently tracking your credit score using these methods, you can maintain a strong credit profile and stay financially prepared for future borrowing needs.
Access credit scores without charges
Many financial platforms and credit bureaus offer free access to your credit score without requiring payment or affecting your score.
Check monthly updates
Free tools typically provide monthly score updates, helping you track changes and trends over time with minimal effort.
Get detailed credit reports
In addition to scores, some platforms also offer free credit reports that detail your credit history, outstanding loans, repayment behaviour, and more.
Use bank and NBFC portals
Many banks and NBFCs provide free credit score access through their mobile apps or net banking portals, sourced from trusted credit bureaus.
Explore financial aggregator platforms
The numerous financial aggregator platforms that are available offer free credit score services along with tips to improve your score and personalised loan offers.
Receive alerts and notifications
Sign up for SMS or email alerts to get notified of any significant changes in your credit score or report, helping you act promptly if needed.
Understand score influencing factors
Free tools often break down your score into categories such as payment history, credit utilization, credit age, and inquiries—helping you focus on areas that need improvement.
Monitor for errors or fraud
Regular use of free tools allows you to detect and dispute errors or unauthorized activity on your report quickly.
No impact on score for checking
Unlike lender inquiries, checking your credit score through free tools is considered a “soft inquiry” and does not harm your credit score.
Educational resources included
Many platforms also provide articles, videos, and calculators to educate users on building and maintaining a healthy credit score.
By using free credit score tools consistently, you gain insights into your financial behaviour, identify areas of improvement, and make smarter credit decisions—without spending a penny.
Review your credit report thoroughly
Start by checking your credit report from all major bureaus to identify errors, late payments, or unusual activity.
Dispute inaccuracies promptly
If you find incorrect information—like a wrongly reported late payment or unknown account—raise a dispute with the credit bureau immediately.
Pay off overdue accounts
Bring any delinquent accounts up to date. Late or missed payments are a major factor in score drops and should be prioritized.
Reduce credit utilisation
Try to keep your credit card balances below 30% of your available limit. High utilization can significantly lower your score.
Avoid new credit applications
Too many hard inquiries in a short period can hurt your credit. Limit applying for new credit until your score stabilises.
Set up payment reminders or auto-pay
Consistently paying bills on time is crucial. Use reminders or automate payments to avoid future delays.
Increase your credit limit
If possible, request a higher credit limit on existing cards. This helps improve your credit utilization ratio, boosting your score.
Maintain older credit accounts
Don’t close old credit cards unless necessary. A longer credit history contributes positively to your credit profile.
Seek professional help if needed
If you're overwhelmed, consider credit counseling from a certified financial advisor to help manage debt and improve your score.
Be patient and consistent
Credit score recovery takes time. Stay consistent with good financial habits and monitor your progress regularly.
Addressing a drop early with the right actions can prevent long-term damage and put you back on the path to strong credit health.
Pay your bills on time
Timely repayment of credit card bills, EMIs, and utility payments is one of the most significant factors impacting your credit score.
Keep credit utilisation low
Try to use less than 30% of your total credit limit. High utilization can signal financial stress and negatively impact your score.
Review your credit report regularly
Check your credit report at least once every few months to identify errors or unauthorized activity that could hurt your score.
Avoid frequent loan applications
Multiple loan or credit card applications in a short period lead to several hard inquiries, which can lower your score.
Maintain a balanced credit mix
A combination of secured (like home or auto loans) and unsecured credit (like credit cards) reflects positively on your credit profile.
Keep older credit accounts open
A longer credit history helps improve your creditworthiness. Avoid closing your oldest credit card or loan account unless necessary.
Monitor your loan repayments Ensure the timely repayment of existing loans by frequently reviewing your loan details and maintaining financial discipline.
Track your loan statements Regularly download and assess your loan statement to stay updated on EMIs paid, outstanding amounts, and due dates.
Limit the number of credit cards
Managing too many credit cards can lead to missed payments. Keep only those that you can responsibly manage.
Set up payment reminders or auto-debit
Automate payments or set reminders to ensure bills and EMIs are paid before the due date.
Build a credit history early
Start with a low-limit credit card or small loan to build your credit history over time, especially if you're new to credit.
Avoid co-signing loans without due diligence
If the primary borrower defaults, your credit score may also be affected. Co-sign loans only when confident in the borrower’s ability to repay.
By consistently following these credit best practices, you can build and maintain a strong credit profile that supports your long-term financial goals.
Understanding the impact of closing a loan against securities on your credit
Closing a Loan Against Securities (LAS) can affect your credit profile in multiple ways. While it may seem like a simple financial move, it's important to understand the potential implications on your credit score and overall creditworthiness. Here's a breakdown of the key points to consider:Positive impact on credit history
Successfully closing a LAS on time demonstrates responsible credit behaviour. This gets reflected in your credit report and may boost your credit score.
Improved credit utilisation ratio
Once the loan is closed, the outstanding debt associated with it is removed. This lowers your credit utilization ratio, which is a critical factor in credit scoring.
Potential short-term dip
In some cases, closing a loan account may lead to a temporary dip in your credit score, especially if it's one of your longer-standing credit accounts. Credit history length plays a role in scoring models.
Release of securities
Upon loan closure, the pledged securities are released back to you. This improves your net worth and financial flexibility, which indirectly benefits your credit profile.
Reduced credit mix
If the LAS was your only secured loan, closing it could impact your credit mix. A diverse mix of credit types (secured and unsecured) is generally favourable for your score.
Impact on future loan eligibility
A closed LAS with no defaults makes you appear more creditworthy. Lenders may view you as a low-risk borrower for future loans.
Confirmation of closure is key
Ensure you receive a no-dues certificate or loan closure confirmation. Inaccurate reporting by lenders can lead to discrepancies in your credit report.
Monitor your credit report
After closing the loan, check your credit report to ensure that the account is marked as "closed" and reflects the accurate status.
No prepayment penalty advantage
LAS typically doesn’t carry a prepayment penalty, so closing it early may not negatively impact your finances while still benefiting your credit profile.
Understanding these aspects helps you make informed decisions and maintain a healthy credit standing after closing a LAS.
Methods to track your credit score after loan against securities closure
After closing a Loan Against Securities (LAS), it’s essential to keep an eye on your credit score to ensure the closure is reflected accurately and to monitor any changes in your credit profile. Here are the most effective methods to track your credit score post-closure:Check with credit bureaus
Visit official websites of major credit bureaus like CIBIL, Experian, Equifax, or CRIF High Mark. Most offer one free credit report per year and options for regular updates.
Use free credit score platforms
Multiple financial websites and apps provide free access to credit scores and reports. Some platforms even offer monthly or real-time updates without impacting your score.
Subscribe to credit monitoring services
These are paid services that offer regular monitoring, alerts for any changes in your credit report, and detailed insights into what affects your score.
Banking and loan apps
Many banks and NBFCs now include credit score tracking features in their mobile apps or internet banking portals. These scores are often updated monthly and sourced from leading credit bureaus.
Review your credit report for accuracy
After your LAS is closed, download and review your credit report to ensure the account is marked as “Closed” or “Paid.” Incorrect information can hurt your score.
Set calendar reminders for periodic checks
Tracking your score every 2-3 months helps you stay aware of any sudden drops or changes, especially after closing a loan account.
Opt for email or SMS alerts
Many credit tracking platforms and banks offer alert systems for any changes in your credit report. These alerts help you act quickly in case of discrepancies.
Use personal finance apps
There are various personal finance apps available that often integrate credit score tracking as a feature. They also give insights and suggestions to improve your score.
Track score movement post-closure
It’s normal for your score to fluctuate slightly after closing a loan. Monitoring helps you understand trends and identify the right time for new credit applications.
Dispute errors immediately
If you find any discrepancies in your credit report after LAS closure, file a dispute with the credit bureau right away to avoid a long-term impact.
By consistently tracking your credit score using these methods, you can maintain a strong credit profile and stay financially prepared for future borrowing needs.
Using free credit score tools and services
Keeping track of your credit health doesn’t have to be expensive. Today, several free tools and services make it easy to monitor your credit score and understand the factors that influence it. Here are some key ways you can leverage these tools effectively:Access credit scores without charges
Many financial platforms and credit bureaus offer free access to your credit score without requiring payment or affecting your score.
Check monthly updates
Free tools typically provide monthly score updates, helping you track changes and trends over time with minimal effort.
Get detailed credit reports
In addition to scores, some platforms also offer free credit reports that detail your credit history, outstanding loans, repayment behaviour, and more.
Use bank and NBFC portals
Many banks and NBFCs provide free credit score access through their mobile apps or net banking portals, sourced from trusted credit bureaus.
Explore financial aggregator platforms
The numerous financial aggregator platforms that are available offer free credit score services along with tips to improve your score and personalised loan offers.
Receive alerts and notifications
Sign up for SMS or email alerts to get notified of any significant changes in your credit score or report, helping you act promptly if needed.
Understand score influencing factors
Free tools often break down your score into categories such as payment history, credit utilization, credit age, and inquiries—helping you focus on areas that need improvement.
Monitor for errors or fraud
Regular use of free tools allows you to detect and dispute errors or unauthorized activity on your report quickly.
No impact on score for checking
Unlike lender inquiries, checking your credit score through free tools is considered a “soft inquiry” and does not harm your credit score.
Educational resources included
Many platforms also provide articles, videos, and calculators to educate users on building and maintaining a healthy credit score.
By using free credit score tools consistently, you gain insights into your financial behaviour, identify areas of improvement, and make smarter credit decisions—without spending a penny.
How to address a drop in your credit score?
A sudden drop in your credit score can be concerning, but understanding the reasons and taking corrective steps can help you recover quickly. Here are practical ways to address and manage a dip in your credit score:Review your credit report thoroughly
Start by checking your credit report from all major bureaus to identify errors, late payments, or unusual activity.
Dispute inaccuracies promptly
If you find incorrect information—like a wrongly reported late payment or unknown account—raise a dispute with the credit bureau immediately.
Pay off overdue accounts
Bring any delinquent accounts up to date. Late or missed payments are a major factor in score drops and should be prioritized.
Reduce credit utilisation
Try to keep your credit card balances below 30% of your available limit. High utilization can significantly lower your score.
Avoid new credit applications
Too many hard inquiries in a short period can hurt your credit. Limit applying for new credit until your score stabilises.
Set up payment reminders or auto-pay
Consistently paying bills on time is crucial. Use reminders or automate payments to avoid future delays.
Increase your credit limit
If possible, request a higher credit limit on existing cards. This helps improve your credit utilization ratio, boosting your score.
Maintain older credit accounts
Don’t close old credit cards unless necessary. A longer credit history contributes positively to your credit profile.
Seek professional help if needed
If you're overwhelmed, consider credit counseling from a certified financial advisor to help manage debt and improve your score.
Be patient and consistent
Credit score recovery takes time. Stay consistent with good financial habits and monitor your progress regularly.
Addressing a drop early with the right actions can prevent long-term damage and put you back on the path to strong credit health.
Best practices for maintaining a healthy credit score
Maintaining a strong credit score is essential for financial stability and access to favourable loan terms. Follow these best practices to ensure your credit health remains intact over time:Pay your bills on time
Timely repayment of credit card bills, EMIs, and utility payments is one of the most significant factors impacting your credit score.
Keep credit utilisation low
Try to use less than 30% of your total credit limit. High utilization can signal financial stress and negatively impact your score.
Review your credit report regularly
Check your credit report at least once every few months to identify errors or unauthorized activity that could hurt your score.
Avoid frequent loan applications
Multiple loan or credit card applications in a short period lead to several hard inquiries, which can lower your score.
Maintain a balanced credit mix
A combination of secured (like home or auto loans) and unsecured credit (like credit cards) reflects positively on your credit profile.
Keep older credit accounts open
A longer credit history helps improve your creditworthiness. Avoid closing your oldest credit card or loan account unless necessary.
Monitor your loan repayments Ensure the timely repayment of existing loans by frequently reviewing your loan details and maintaining financial discipline.
Track your loan statements Regularly download and assess your loan statement to stay updated on EMIs paid, outstanding amounts, and due dates.
Limit the number of credit cards
Managing too many credit cards can lead to missed payments. Keep only those that you can responsibly manage.
Set up payment reminders or auto-debit
Automate payments or set reminders to ensure bills and EMIs are paid before the due date.
Build a credit history early
Start with a low-limit credit card or small loan to build your credit history over time, especially if you're new to credit.
Avoid co-signing loans without due diligence
If the primary borrower defaults, your credit score may also be affected. Co-sign loans only when confident in the borrower’s ability to repay.
By consistently following these credit best practices, you can build and maintain a strong credit profile that supports your long-term financial goals.
