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What’s the first thing that comes to your mind after hearing the word “credit report?” CIBIL score, right? Well, that’s instinctive.

Imagine applying for a personal loan and spotting “Suit Filed” next to your name in your credit report. Confused? You’re not alone.

A credit report reflects how you handle money, including bills, EMIs, overdue payments, and even errors you may not know exist. Every transaction you make, from paying your EMI through UPI to managing your credit card bills, leaves a mark here.

When you apply for a loan or a credit card, the lender needs to assess your profile. They want to ensure that you can repay the amount within the specified time. The credit score is a numeric representation of your previous credit behaviour. It reflects how well you have managed your loans or credit card repayments. Equifax is one prestigious organisation that evaluates your creditworthiness. After analysis, they give you a 3-digit number called the credit score. It can be anything between 300 and 900. The higher your score is, the more creditworthy you as a borrower will be.

Rahul, a 32-year-old IT professional in Bengaluru, applied for a Personal Loan to renovate his apartment. His salary was strong, his job was stable yet the application was rejected within hours. The reason? A CIBIL score of 620. He had missed two credit card payments eight months ago and assumed it would not matter. It did.