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Understand Everything About CIBIL Score

cibil score

CIBIL, now known as Credit Information Bureau (India) Limited, is the country’s primary provider of accurate credit information. This company calculates a CIBIL score, which is a credit rating. CIBIL score check is available for free on a number of websites. However, obtaining a CIBIL credit report is a fee-based service.

What is a CIBIL score?

It’s a three-digit figure that sums up someone’s credit score. A credit score of less than 700 is considered typical, and a big percentage of tier 1 banks will not lend to you. A CIBIL score of less than 600 is deemed poor, and nearly no financial institution or private lending organization will accept it.

Where to find the CIBIL score in the CIBIL report?

The CIBIL report has the Accounts section and the Enquiries section. Both these sections indicate the CIBIL score. There is also an indication of current loan accounts, past loan accounts, credit card statuses, payment statuses, outstanding loan amounts and due dates missed. Simple studying the CIBIL report is enough to understand one’s personal financial standing.

Where can I get a CIBIL report?

If there are sites that are offering CIBIL score free check, considering using them. These sites may or may not provide the full copy of your credit report. To get a full copy, visit the CIBIL site, pay the amount and get a PDF version of your CIBIL credit rating report delivered to your email ID. You can also have the report posted to a physical mail address.

What are the factors that are taken into consideration to compute a credit rating by CIBIL?

A scoring algorithm is used. A number of data points are used for this purpose. Macro-level credit and money trends are also factored in. A person’s three years past credit history is used as a reference. Based on this data, a person’s payment history is scrutinized. The person’s mix of secured versus unsecured loans is taken into consideration. Inquiries made by loan providers also have a bearing on the credit rating. Lastly, credit utilization is considered, as well.

Some other factors that could impact your credit score but is not given as much as weightage  by the scoring algorithm are:

  • Duration of your credit history
  • Depth of credit
  • Duration of your outstanding balances
  • Credit card transaction behavior and repayment pattern
  • Actual repayment to total amount due ratio
  • Number of new credit card accounts opened or closed

How can the CIBIL score be improved?

  • Maintain a healthy mix of secured versus unsecured loans. More of the latter may have a negative impact on your CIBIL score.
  • Review your credit history every three months. Subscribe to CIBIL to regularly receive reports, updates, tips, and associated financial information.

Important Points to Remember

  • The CIBIL score is a three-digit number that represents your credit repayment history.
  • It demonstrates your borrower’s trustworthiness.
  • Paying off your existing debts promptly will help you improve your CIBIL score.
  • You should also avoid using your credit cards’ full credit limits.
  • Lenders are more likely to accept loans swiftly if your credit score surpasses 750 points.

Last but not least

Make sure you follow the advice now that you know how to improve credit score. Always keep in mind that raising your CIBIL score is a gradual process that will take time. Be patient and consistent, and keep track of your CIBIL score so you may make modifications as needed.

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