What is the Cibil Score CIBIL Score is a score that tells your financial score. CIBIL score is also known as a credit report. It is needed at the time of bank loan. Generally, the CIBIL score records the payments related to loans and credit cards submitted to CIBIL by banks and other lenders every month. This makes it easy to give loans to banks and NBFC companies.
A credit monitoring system was created in Western countries in the year 1950. Along the same lines, in the year 2000, a Credit Rating Agency was started in the name of CIBIL. CIBIL is playing its role well in making the country financially literate. With this, the financial market is being made as transparent as possible so that the financial institution can manage the risk properly. CIBIL is constantly updating its database, technology, and software, increasing awareness among financial companies, and working to prevent bad loans (in which recovery is not possible).
CIBIL is the largest credit bureau organization in the entire country which is placed under RBI. It started with the Credit Information Companies Act 2005. Now here it comes to whose credit score is it and how is it checked? Any citizen of the country can check his credit score online very easily. Many companies provide facilities to check credit scores. Below is the name of some companies from which you can also check your credit score.
What is CIBIL SCORE?
The full form of CIBIL is the Credit Information Bureau of India Limited. TransUnion CIBIL Limited is India’s first Credit Information Company also commonly known as Credit Bureau. Using this information, a Credit Information Report (CIR) and a credit score are developed, thanks to which lenders evaluate and approve loan applications. CIBIL Transunion Score is a three-digit number that is between 300 and 900. It depends on the credit history. Here a high credit score is considered good. If we talk in one word, then it shows the ability to return the loan amount with interest within the time limit. This is the number that decides whether the loan should be given to the applicant or not?
“Credit score indicates the eligibility to return the loan amount.”
CIBIL Score or Credit Score contains the financial report of your last six months. If you have made proper loan and credit card payments then your credit score is good. If you have made any mistake here, now you will have to face many difficulties in getting the loan. If your credit score is more than 750 then you can get a loan easily. Transunion CIBIL Limited is the first credit information company in India that provides such information about the loan applicant. So that consumers can get a loan quickly on easy terms.
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How does the CIBIL score work?
Reports on timely loan and credit card payments are submitted by banks and financial institutions to CIBIL every month. Credit Information Report and Credit Score are created using this information. CIBIL Score or Credit Score is seen prominently for the approval of any loan. Any financial institution checks the credit score of the applicant before granting a loan. If the credit score is low then the lender ie the bank or financial institution first asks to correct it. The loan is readily available if the credit score is good (750-900).
CIBIL SCORE Calculate is done based on Credit History. Many things are taken into account here. Such as – Credit History (30%), Credit Mix & Duration (25%), Credit Exposure (25%), Credit Utilization (10%), and Recent Credit Behavior (10%).
On what does the CIBIL SCORE depend?
Many such facts keep changing in CIBIL SCORE. Some important facts are mentioned below.
- Unsecured Loans – As its name suggests, banks or NBFC companies do not keep any assets as a mortgage in such loans. Such a loan works for your CIBIL SCORE.
- LOAN Repayment – How the repayment of any loan has been done or is being done. Not paying EMI on time adds to the problem.
- Credit USE – Loan credit is decided based on credit score, and how much loan can you get. Never use full credit.
- Loan Duration – Always take maximum time to repay the loan. Due to this, the EMI is very less and loan EMI is deposited easily. If you have the budget then you can deposit the loan amount even before time. This keeps the credit score good.
- Loan Applications – If a loan is applied for several places simultaneously and is rejected, then that is also counted. Too many rejections ruin the credit score. In such a situation, avoid applying for a loan in many places at once.
- Credit Limit – It has been seen many times that people always want to increase credit. This is enough to spoil the CIBIL SCORE.
- Guarantor / Co-Borrower – Taking a loan or becoming a guarantor comes under the credit score. In such a situation, avoid becoming a guarantor in a risky loan.
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What should be the CIBIL SCORE?
Generally, it ranges between 300 and 900, and a score above 750 is considered a correct CIBIL score. If the CIBIL SCORE is less than 300 then no bank will give the loan. Before providing a loan, any financial institution wants to decide whether the applicant will be able to return the loan amount with interest on time or not? What should be the CIBIL score? This is a very important question. Have you ever applied for a loan and got rejected because of your CIBIL score, then definitely tell me in the comment section.
- A score between 750 to 900 shows the best financial track record. Here you can get all types of loans on your terms. Like Loan Tenure, Loan Amount, and Credit Card Limit.
- A loan credit card will be easily available between 600 to 700 but, Negotiation cannot be done.
- The loan amount and credit card limit are very less from 450 to 600.
- Getting a loan if you have a credit score of less than 450 is completely up to the bank, if the EMI is given on time, then maybe it can be improved.
“600 to 750 is placed under a better credit score.”
How to do better CIBIL SCORE?
If you want to make the loan process easier, then you have to pay attention to the credit score, if some important things are not ignored, then it can be improved very easily.
- Always pay EMIs ahead of time or on time. In case of delay, interest also has to be paid and credit score is also bad.
- Set reminders to get EMI deposited on time.
- Maintain a credit mix such as unsecured loans (in which there is no guarantee) along with secured loans should also be included in the portfolio.
- If the bank wants to increase the credit limit, then definitely increase it, but use it as per the need. With this, the available credit is always more which improves the credit score.
- Pay all credit card bills on time.
- Avoid using credit cards to the extreme limit, the less you use them, the sooner your credit score will improve.
- Keep the loan tenure more. This will reduce the installment which can be easily paid.
- Don’t take multiple loans at a time if there is not a lot of need.
HOW TO CHECK CIBIL SCORE?
If you want to take a loan in the future, then keep your credit score better from now on. But, for this, it is also important to know, how to check CIBIL score? It is explained below in very simple words. There are many websites to check CIBIL scores, out of which I am telling about one website here.
- To check the CIBIL score, click on FREE CIBIL SCORE CHECK.
- Here a form has to be filled in which name, address, PAN card number, and phone number have to be entered.
- After this, some questions have to be answered.
- Your CIBIL score is in front of you in no time.
Here you can check your credit score for free only once. If you want to check further then you have to subscribe to CIBIL.COM.
- Credit Bureau Companies in India
- TransUnion Credit Information Bureau (India) Limited (or CIBIL)
- Equifax
- CRIF High Mark
- Experian
Conclusion CIBIL SCORE
What is CIBIL SCORE? An attempt has been made to give complete information about this. Hope all the questions related to the CIBIL score have been answered.
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