CIBIL score ranges from 300 to 900. The higher the score, the better it is.
Even a delay of a few days in repayment of your installments can have a negative impact on your score — especially if there are multiple instances
Credit score is an indicator of your credit health and your repayment capabilities and is an input used by lenders to extend all types of loans. The credit score of the borrower is looked at while seeking loans from banks or any other financial institution. Credit score is provided by companies like TransUnion CIBIL, Experian, etc. Here’s how you can maintain a good credit score.
CIBIL score ranges from 300 to 900. The higher the score, the better it is. Generally, a score above 750 is considered good, where the chances of loan approval become higher.
Siddharth Mahnot, COO & Co-Founder, Indifi Technologies, “To maintain a good CIBIL score, there are a myriad of measures you can adopt; The easiest way to pay credit card bills and EMIs on time. However, to improve your credit score, a lesser known option is to take small loans which you are confident that you can repay promptly and do not apply for loans unnecessarily. This will help establish a positive credit history, which is important when applying for more substantial loans in the future.”
He said that your credit score is an indicator of your credit health and your repayment capabilities and is an input used by lenders to extend all types of loans. Hence, how good or bad it impacts your credit journey. As an entrepreneur, your personal credit score will act as a catalyst in the long run and you can negotiate a better interest rate.
Aditya Kumar, Co-Founder & CEO, NIRO, “More than anything else, ensure that all your loan installments are due on or ideally before the due date. It is considered to be the biggest contributor to your credit score. Also allow enough time for the amount to be credited to the relevant account — in some cases, it can take up to 48 hours. Even a delay of a few days in repayment of your installments can negatively impact your score – especially if there are multiple instances of this.”
He also says that if you have a credit card (or multiple credit cards), keep your credit utilization at healthy levels — ideally no more than 30 percent of your total credit limit. “Maxing out” the credit limit on your card may be viewed negatively by the bureaus, and may affect your credit score.
“Apply for credit when it is necessary – and do not apply for credit if you have recently been declined for a loan. Multiple and successive ‘loan inquiries’ can adversely affect your credit score, even if Only those loans are finally sanctioned,” Kumar said.
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