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CIBIL score
CIBIL score is a 3 digit numeric score ranging from 300 to 900. It is a reflection of your credit profile. A credit profile is considered good if the credit score of above 750. Lending institutions use CIBIL score as one of the significant ways to identify a person whether he is creditworthy or not. If you apply for a loan or credit card, the first and foremost work of banks and lending institutions is to check your CIBIL score.
What is CIBIL?
CIBIL, Credit Information Bureau(India) Limited is a credit information company that was established in 2000. It manages all credit-related activities records of all companies and individuals including credit cards. It provides the CIBIL report also known as CIR(Credit Information Report).
CIBIL report and CIBIL score.
A CIBIL report is a document containing both financial information(like credit summary, loan account information, repayment details, etc) and personal information( like Name, Address, PAN number, etc).
CIBIl score is a 3 digit number calculated by a scoring algorithm taking into account a large number of points like payment history, secured or unsecured loans, credit utilization, duration of credit history, the ratio of actual repayment amount to the total amount, etc. This score is based on the last 36 months of credit history. A high credit score expresses your good financial discipline.
CIBIL score ranges.
CIBIL score ranges from 300 to 900. Above 750 scores are considered good and most banks and lending institutions deny the loan applications if the CIBIL score is less than 750. Very few lending institutions process the loan application with a higher rate of interest if the CIBIL score is in the range of 600 to 750. Range 300 to 600 is a bad CIBIL score.
Tips to improve the CIBIL score.
You can improve the bad CIBIL score by following the mentioned methods. It takes atleast six months to witness a significant change in the CIBIL score.
- Pay your dues on time.
- Have a blend of secured loans and unsecured loans.
- No extending of tenures. suppose you took a car loan for 5 years and increased the tenure to 7 years in the midway will affect your CIBIL score.
- Don’t be a guarantor or joint account holder of any loan. because if you are a joint account holder or guarantor of any loan then you are equally liable. And missed payments in that loan affect your score. So Monitor carefully those accounts.
what is the CIBIL score of a person with no credit history?
CIBIL score exists only if you are already availed of any loan or credit card. The CIBIL score of a person with no credit history is -1. The CIBIL score of a person with six months of credit history ranges from 1-5.
A Discrepancy in CIBIL score.
suppose you found any discrepancy in your CIBIL score, you can approach the lender to update the correction in CIBIL or raise a dispute on the CIBIL website.
How to check my CIBIL score.
Click the link below
