It helps you see your credit standing among lenders, allowing you to take corrective measures, if needed.

The Reserve Bank of India recently directed all credit institutions to provide one consumer credit information report (CIR) each year, free of cost, to individuals whose credit history is available with them, effective 1 January 2017. Here's why you should avail of your free copy.

Ensure accuracy

The CIR contains details of your credit history: taking and repaying loans from banks and financial institutions. By accessing your CIR, you can ensure that the information reflected is accurate. If you find any discrepancies in the information, get it corrected by approaching the credit bureau through its online dispute resolution forum.

According to Mohan Jayaraman, Managing Director, Experian Credit Bureau, errors in personal information do not affect one's credit score directly but could signal a possible fraud, such as identity theft.

Monitor your loan accounts

The CIR is a useful tool to monitor the one's loan history. It also provides a snapshot of your credit cards--the ones you own and the ones you may have provided to your spouse or children.  Again, there is room for error.  In your report, you could find a loan that you have never taken but it's reflected under your name. This could have a negative impact on your overall score since you not repaying it.

Maintain credit health

Reviewing the credit report makes you aware of your financial health: How much debt you owe, how you are faring when it comes to repayment of loan EMIs and credit card dues. It also reveals the number of times you have applied for a loan or a credit card. The CIR can also pro vide information on detrimental flags--"Written-Off" or "Suit Filed"--against your loan accounts. A credit health check-up allows you to take steps against being labelled a risky borrower.

Build a credit history

If you are new to availing credit, monitor your CIR to build a healthy history which will come in handy when applying for bigger loans."Apply for a credit card and carry out small monthly transactions.Pay the full amount each month. It takes three to six months of credit activity before a credit score can be calculated for a new consumer. You must be prudent with your repayment to establish yourself as a responsible consumer.

Individuals should monitor their credit report regularly.Just like your regular health check, you must also run a financial health check for financial stability