As part of the government’s financial inclusion efforts, more and more people are now joining the formal banking system. As soon as a person opens a bank account, he/she may get a credit card or loan offer but the loan or credit card is sanctioned after checking the credit rating of the customer. CIBIL score is one of the credit ratings given to a borrower by the credit information company TransUnion CIBIL. Know here what is CIBIL score, its importance and how you can maintain a good score.
What is CIBIL Score?
From 300 to 900, CIBIL Score is a three digit number. The higher the score you have, the better. Generally, a score above 750 is considered good, where the chances of loan approval are high. It is a numerical summary of your credit history and a reflection of your credit profile, which reflects your credit behavior as a borrower. It also shows whether you have defaulted on any repayments in the past. This score gives an overall indication of your creditworthiness and history.
The report containing CIBIL score is called CIBIL report. The report has tabs – Personal Information, Contact Information, Employment Information, Account Information and Inquiry Information.
CIBIL Score: Its Importance
When you approach a bank for a loan, the bank checks your creditworthiness and your past repayment records. The bank approves the loan only if your CIBIL score is good. So maintaining a good score is very important. The score saves individuals any paperwork hassle to prove the record of past credit.
The CIBIL report allows the bank to take a look at your credit history, including whether you have been punctual in repaying your previous loans. It also shows how many loans you have taken so far, including the amount and the period of previous credits. This includes records relating to both credit cards and loans. It helps banks to reduce the risk of default and hence minimizes losses.
CIBIL Score: How can you maintain a good score?
Do not delay in payment of dues: If you want to maintain a good CIBIL score, the first and foremost thing is to be strict with repayment – pay within time and never delay. Paying off loan or credit card dues has a huge impact on your CIBIL score.
Don’t keep your credit card limit always exhausted: If you are struggling to stay within the card’s current limit, it is advisable to get a credit card with a higher top limit. To get a good CIBIL score, the credit utilization ratio should be limited to 30 percent.
Miscellaneous Loan Products: It is better to diversify the loan portfolio with a good mix of both secured and unsecured loans to get a high CIBIL score. A credit card is an unsecured loan, whereas a home or vehicle loan is a secured loan.
how to check cibil score
CIBIL provides one report in a year without any charges and it can be checked online. Following are the steps through which you can check CIBIL score:
1) Visit the official CIBIL website https://www.cibil.com/
2) Select ‘Get your CIBIL Score’
3) Click on ‘Click Here’ to get your free Annual CIBIL Score
4) Type your name, e-mail id and password. Attach an ID proof (Passport Number, PAN Card, Aadhaar or Voter ID). Then enter your pin code, date of birth and also your phone number
5) Click on ‘Accept and Continue’
6) You will get One Time Password (OTP) on your registered mobile number. Type OTP and select ‘Continue’
7) Select ‘Go to Dashboard’ and check your credit score
8) You will be redirected to the website myscore.cibil.com
9) Click on ‘Member Login’ and once you are logged in, you can view your CIBIL Score.
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