In today’s times, consumers often turn to credit cards and loans to help them achieve their financial goals and dreams. The CIBIL ™ score is a vital factor which helps in getting access to this much-needed credit.
1. What is a CIBIL ™ score?
A CIBIL ™ score is a consumer’s credit score. It is a three-digit numeric summary of a consumer’s credit history and a reflection of a person’s credit profile. This is based on the credit behavior of the consumer in the past, including the borrowing and repayment regularity as shared by banks and lenders with CIBIL ™ on a regular basis.
The score is based on the details found in the ‘Accounts and Enquiries ‘ section of the CIBIL ™ report and includes loan accounts, credit cards, outstanding amounts, payment statuses and days past the due date.
A person’s past credit history is taken as an indicator of his future actions and in line with that; the CIBIL ™ score showcases a consumer’s creditworthiness. When a person applies for a credit card or a loan, one of the important factors that lenders check is the credit profile as stated by the credit score.
TransUnion CIBIL ™ is India’s leading credit information company with one of the largest collections of customer information. It was set up in the year 2000.
2. What is a CIBIL ™ Report?
A CIBIL ™ Report is a consolidated credit report that includes a person’s CIBIL ™ score and credit summary, personal information, contact information, employment information and information relating to loan accounts including credit cards. It is pertinent to note that lenders assess both a person’s credit score and also the credit report while determining credit eligibility.
3. Factors that impact a CIBIL ™ score?
The CIBIL ™ score is generated by an algorithm, which takes into account a large number of data points and macro-level credit trends. It is primarily based on the past 36 month’s credit history. It considers four key factors that impact a consumer’s CIBIL ™ credit score – payment history, credit mix of secured and unsecured loans, enquiries for credit and total credit utilization. The latest credit score, however, also includes the depth of credit, which is the duration of existing credit history, long-term outstanding balances, transaction history on credit cards, the ratio of total repayment to actual amount due and new accounts opened/closed.
4. How to work towards a positive CIBIL ™ score?
Your CIBIL ™ is a reflection of your credit history and past payments but will impact your access to future credit. You can take steps to build a healthier credit score by following these steps:
· Always be financially disciplined and pay your dues on time.
· Control your credit utilization and keep your balance payments low.
· Maintain a healthy mix of secured and unsecured loans as too many unsecured debts like credit cards are viewed negatively.
· Closely monitor your co-signed, guaranteed or jointly held accounts where you are jointly held liable for any missed payments, which could affect your credit score and the access to credit when you need it.
· Review your credit history regularly throughout the year. Also, monitor your CIBIL ™ score and report regularly and report any inaccuracies. In case of any inaccuracy, you can raise a dispute on the CIBIL ™ website or request the lender to report the correction to CIBIL ™.
5. How to check your CIBIL ™ score?
The procedure to check your CIBIL ™ score is as follows:
Step 1: Log on to the official website of TransUnion CIBIL ™.
Step 2: Navigate to the ‘Personal’ tab and click on the ‘Get Yours Now’ button, for a
Credit score. However, you need to pay the specified charges for any
Step 3: Consider you have opted for a free CIBIL ™ score. You are directed to a page
which will prompt you to enter your personal information to sign up as the first
step. In the next step, you will have to verify your identity with a government
Issued identity proof.
Step 4: You can sign in to your account if it already exists on the site.
Step 5: Your credit score will be sent to you via the email address entered by you during
How to get your CIBIL ™credit report?
It is very easy to obtain your latest CIBIL report directly from the website of TransUnion
Step 1: Every individual can avail of the facility of a free credit score once a year. If you have
already used up that opportunity, then you need to select from the following plans:
· 1-month subscription – Rs 550
· 6- month subscription – Rs 800
· 1- Year subscription – Rs 1,200.
Step 2: Enter your personal details in the generated online form.
Step 3: Enter the captcha as shown and check the box to accept the terms and conditions.
Step 4: After making the prescribed payment, you will receive your credit report , after
Authentication of your account within a period of 24 hours.
What are Good and Bad Scores?
· A CIBIL ™ score between 850- 900 shows that you have never defaulted and constitutes an excellent credit score.
· It is a well-laid-out fact that 79% of the loans sanctioned are for people with a credit score of 750+. Also, scores above 800 are considered high and can easily avail lower interest rates on personal loans and credit cards.
· A CIBIL ™ score of 700-750 is considered a good score for secured loans. However, for unsecured loans, the bank might consider your social score or have slightly higher interest rates.
· A score between 500-700 indicates a default a few times in the past, which will lead to hefty interest rates.
· A score of 300-500 points to too many discrepancies in past loan repayments and may not be eligible for any further credit.
A good credit score will always help you to get credit easily and maintaining the same will make sure that the credit is provided to you without any hassles.