What is CIBIL Score?
Before discussing how to improve CIBIL Score, let us know what CIBIL score is. A three-digit numerical summary of your credit history is known as the Credit Information Bureau (India) Limited (CIBIL).
Besides that, Between 300 to 900 is the possible range for the CIBIL Score. Additionally, the maximum credit is typically defined at 900. It represents the credit profile of the consumer and outlines their credit history.
How does CIBIL Score work?
One of the most important considerations banks make before providing you with a loan or credit card is your CIBIL Score. Based on the CIBIL score, customer applications will be approved or denied.
Furthermore, your bank will create a credit report and use your credit history to assess your creditworthiness. Therefore, you should take the appropriate actions to keep your CIBIL score steady.
How is the CIBIL Score calculated?
There are four major factors that influence the CIBIL Score.
- Payment History: Payment History is a key factor affecting your CIBIL Score. If you are delayed or missed any EMI, it will reduce your CIBIL Score. This kind of payment behaviour should be avoided to maintain your score high. Defaulting your EMIs negatively impacts your CIBIL Score. Sometimes your score may be reduced by 100 points.
- Credit Exposure: Credit exposure refers to the amount of credit you use in proportion to your available credit limit. It is suggestible to use 30% of your total credit limit. As a result of the high usage of your credit cards, lenders could think that you are at a high risk of becoming a defaulter resulting in subsequent application rejection.
- Hard Inquiries: If you apply for a credit card or loan, the company pulls out your CIBIL report from the Credit bureau. This type of inquiry is called a hard inquiry. Making such multiple inquiries will show a negative impact on your score. You need to keep away from applying multiple lines of credits at the same time.
- High Credit Utilization: A long credit history refers that you know handling credit. High credit utilization limit indicates a rising debt burned over time and may show an adversary effect on your score. There should be a balance between secured loans and unsecured loans.
|CIBIL SCORE RANGE||MEANING|
|300- 550||Your CIBIL Score is in a poor range, which suggests. This indicates that you have missed several payments while making them. You’ll have a hard time getting a loan.|
|550- 700||It means your CIBIL Score is average. That means you made a few irregularities with your payments. Banks may think that it is a bit risky to give you a loan.|
|700- 750||Your CIBIL is good. You are a decent track record while paying EMIs. However, after conducting some credit analysis, banks will issue the loans to you.|
|750- 900||Your CIBIL Score is excellent. It demonstrates that your credit history is remarkable. A bank loan is simple to obtain. A house loan, a personal loan, and other unsecured loans are also available.|
How to improve CIBIL Score?
Here are some specific circumstances that must exist in order for you to receive the best response to your query on how to improve CIBIL score.
- Always make your EMI payments on time. Late or default in payments shows negative behavior in terms of payment to the lender.
- Try to reduce the usage of your credit card. You shouldn’t exceed 30% of your total credit card limit. It is essential if you want to apply for a home loan.
- If you made any mistakes while paying the EMIs, make sure to pay off the unpaid amount and close the account instead of opting for a settlement.
- Checking your credit timely is essential to understand your credit health. It will help you ensure that your credit report is free from any errors related to your credit accounts.
- Maintain a proper balance between secured (home loan, auto loan) and unsecured loans (Personal loan, credit loan).
How to check your CIBIL Score?
- Go to the official CIBIL Website: www.cibil.com
- Select ‘Get your CIBIL Score’.
- Fill out the form with all the required details, like Name, Email ID, password, and ID proof.
- Then enter your Pin Code, date of birth, and phone number.
- Click on accept and continue.
- You will receive an OTP to your mobile number. Type the OTP and tap on continue.
- Check your credit score by clicking “Go to dashboard.”
- You’ll be sent to the website myscore.com after the redirect.
- Please select Member Login. You may view your CIBIL Score after logging in.
Frequently Asked Questions
Q1: How to increase CIBIL Score?
A1: Here are a few strategies for raising your CIBIL Score. Your query regarding how to improve CIBIL score immediately will be answered right away by following the steps below.
- Be consistent in making your loan and credit card payments; pay them on time.
- For a good CIBIL Score, keep your credit usage percentage at 30%.
- If you have trouble staying under the limit, it is advised to acquire a credit card with a large upper limit.
- A solid balance of secured and unsecured loans is preferable. Verify and keep an eye on your CIBIL Score.
Q2: Does CIBIL Score decrease if you check it?
A2: NO, using a soft inquiry to verify your personal CIBIL score won’t harm your credit. Hence you can check your CIBIL score as many times as you want. In fact, it is a good idea to check the CIBIL score frequently. When an employer or landlord checks your CIBIL Score with your permission, there are a few more soft inquiries. When a lender checks your credit score to sanction you a loan all these inquiries won’t affect your CIBIL score.
Q3: How to improve CIBIL Score after settlement?
A3: Following these specific requirements can help you raise your CIBIL score after settlement.
- Clear all the pending dues.
- Build a good credit payment history.
- Good credit utilisation.
- Proper management of credit cards if you are using more than one. Applying for a secured card.
- After settling, you need to ensure that you do not look like a credit-hungry prospect. Do not raise frequent loan queries.
- Do not exceed 30% of your credit limit.
Comment below to tell us your CIBIL Score.