A credit score, or CIBIL score, is a 3-digit numerical score representing your creditworthiness. This score indicates how well you manage your credit. In simple terms, this score helps lenders determine whether you will be able to repay the loan in the given tenure or not. Higher the score, higher are your chances of loan or card approval.
A credit bureau calculates this score depending on your credit history and mix, among other factors, and ranges between 300 and 900. The most common bureau in India is TransUnion CIBIL. Apart from that, CRIF High Mark, Experian and Equifax are a few other bureaus responsible for calculating credit scores in India.
Read through the following sections to get a clear idea of the CIBIL score and how it is checked.
You can check your CIBIL score through Bajaj Markets for free. Additionally, you can also visit the official website of TransUnion CIBIL to get a free credit score. You simply need to follow these steps:
Step 1: Vist the Bajaj Markets website.
Step 2: Click on 'Check CIBIL Score'.
Step 3: Enter a few personal details, such as your employment type, name, PAN, mobile number, date of birth and more
Step 4: Click on 'Get OTP'.
Step 5: Agree to the terms and conditions.
Step 6: Enter the OTP sent to your registered mobile number.
Upon verification of details, you will be able to view your free credit score.
Step 1: Visit the TransUnion CIBIL website.
Step 2: Click on 'Get Your Free CIBIL Score'.
Step 3: Enter your personal information, such as name, ID number, date of birth and more. In this step, you are also required to create an account by providing a strong password of your choice.
Step 4: Click on 'ACCEPT & CONTINUE'.
Upon verification, you will get your free CIBIL score.
To check your CIBIL score, you must provide some basic details. These include:
Your personal information, such as name, address, date of birth, mobile number and more
Type of employment, i.e., whether you are salaried or self-employed
Your monthly income or annual turnover
In a nutshell, your credit score provides a snapshot of your credit health. It indicates the lenders and lets them understand whether you are a responsible borrower or not. Considering these parameters, knowing your credit score is crucial because:
When you receive your credit report, you get to know your standing pertaining to your credit. It is a summary of your past and present credit transactions. By checking this score at regular intervals, you can avoid any discrepancies and work towards improving your score.
This is yet another importance of credit score. Lenders usually consider a good CIBIL score as one of the primary eligibility factors for loans. In this regard, a credit score of 750 and above is considered ideal. Thus, if you maintain a good credit score, your chances of availing a loan become higher.
While learning about credit score, it is essential to know that every other individual falls under different categories depending on his/her score. In this regard, one may have a good or bad CIBIL score. Here is a tabular representation of the CIBIL score range:
750 or more
*Note that the CIBIL score range in the above-mentioned table is indicative and may vary from one bureau to another.
Click to check more details about different CIBIL Score Range.
There are two types of CIBIL inquiries, namely:
When you check your credit report, it is considered a soft inquiry, whereas when a credit card issuer or a lender checks your credit report, it is called a hard inquiry. Typically, soft inquiries do not hamper your credit score. However, if done over a short span, multiple hard inquiries can significantly hurt your CIBIL score.
Maintaining a healthy credit score is beneficial for borrowers due to the following reasons:
One of the primary advantages of a good credit score is that it increases your eligibility to avail of loans. Some financial institutions might even offer you pre-approved offers if you have a high credit score.
With a high credit score, lenders might offer you a loan with a lower interest rate. This is because you have already established that you are a responsible borrower.
Apart from the lowered interest rate, you might ask your lender to increase the loan tenure.
Credit bureaus consider several factors before calculating your credit score. Here are a few factors that affect your credit score:
History of loan repayment
Timely loan repayment can boost your credit score significantly. At the same time, if you default on your loan repayments, your credit score will fall.
Age of credit history
The age of your credit history is another crucial factor affecting your CIBIL score. If you have availed of credit cards or loans for a long time and have repaid them consistently, you will have a high credit score.
Credit utilisation ratio
It is the percentage of the credit limit that you use every month. Ideally, you should not use more than 30% of your credit card's limit to maintain a healthy credit score.
Other factors affecting your CIBIL score are:
Your credit score might be low due to various reasons, such as:
Irregular credit card or loan repayment
Missed EMI payments
No credit history
Too many unsecured loans
Multiple hard inquiries
The discrepancy in credit report
If you have a low credit score, you do not need to worry, as there are a few ways through which you can improve it. They include:
Pay your dues
This is the most important step to improving your credit score. Consider paying all your debts on time to improve your credit score gradually.
Review your credit report at regular intervals
Checking your credit report at least once a year helps you keep a tab on your open and closed credit accounts. In addition, it also helps you address any discrepancies.
Avoid taking too many loans at the same time.
Such behaviour depicts that you are credit hungry and negatively impacts your credit score.
Maintain a good credit mix
A mix of unsecured and secured loans shows that you can handle both types of loans. This increases your creditworthiness.
The credit score is a common eligibility parameter when you apply for loans. Having said that, when lenders run a credit check, they try to assess what kind of a borrower you are. In this regard, your credit history helps them know how well you have managed loans and credit cards in the past.
Thus, irregular debt payments and maxed-out credit cards might pose you as a risky borrower, hampering your creditworthiness.
While you can provide your Aadhaar Card for checking CIBIL score as an ID proof on the CIBIL website, at present, it is not possible to check your CIBIL score using Aadhaar Card only. Since your credit score is linked to your PAN card, you need to provide your PAN to check this score.
Credit score and CIBIL score exhibit the same definition. However, the credit score that TransUnion CIBIL provides is called the CIBIL score. Apart from that, you can check your credit score through other bureaus, which include Experian, Equifax and more.
Now, a CIBIL score is different from a report, given the fact that CIBIL or credit score is just the numerical representation of your creditworthiness. On the other hand, a credit report contains comprehensive credit details.
Bajaj Markets allows you to check your credit score for free by following a few simple steps. You simply need to visit the official website and navigate to the check your CIBIL score section. The process is extremely simple and convenient.
Moreover, since TransUnion CIBIL powers the function, you can stay assured of the data being authentic.
The RBI provides licences to four credit bureaus to operate in India. They are:
CIBIL score is a 3-digit numerical representation of your creditworthiness. It helps determine lenders whether you are a responsible borrower or not.
A good credit score is important because it shows that you are a responsible borrower and would pay your credit on time without defaulting. It increases your chances of loan application approval.
It is absolutely safe to check your credit score via Bajaj MARKETS, as TransUnion CIBIL powers it.
Improving a low credit score is a gradual process. Thus, when starting the process, you should remember that the change will not happen overnight. You will have to follow healthy practices for months until you see results.
You can maintain a good credit score by making timely due payments, having a good credit utilisation ratio, not defaulting on loans and keeping a good credit mix.
The credit score ranged between 300 and 900. Typically, most lenders consider a score of 750 or more ideal.
Yes, you can get your CIBIL score for free through credit bureaus' websites. Alternatively, most third-party websites also offer free credit scores.
Most lenders would demand a CIBIL score of 750 or more to disburse a personal loan. Thus, you should aim to keep a high credit score before applying for personal credit.
There is no shortcut to increasing your CIBIL score quickly, as the process is gradual and might take months. However, you can review your credit report and see for any discrepancies. If found, you can report the same to the credit bureau to increase your credit score quickly.