The CIBIL score of an individual is a good indicator of their creditworthiness- how much a lender can trust the borrower for timely repayment of loans. Almost anything that indicates good/bad financial behaviour on the part of the borrower impacts their CIBIL score. Some of the factors that affect the CIBIL score include timely/delayed repayment of loans/credit card bills, credit utilisation (in case of lines of credit such as credit cards) and length of the credit history.
Based on the factors that affect your CIBIL score, you, as a responsible borrower, should adopt certain financial habits that indicate high creditworthiness and therefore help you maintain a healthy credit score.
We are listing down 5 such financial habits that you should adopt for a good CIBIL score-
The very first step to maintaining a healthy credit profile is to be aware of what is affecting your credit score. It is therefore advisable to keep tabs on details such as credit enquiries, active credit account(s), closed credit account(s) that reflect on your CIBIL report. In case you notice any error or discrepancy in your credit report, you must immediately report the same to CIBIL for rectification.
Financial punctuality is the single most important factor that affects your CIBIL score. If you have active loans or credit cards, it is advisable to never miss the payment due date of your monthly instalments or credit card bills. Timely repayment of loans and credit card bills indicates good financial behaviour on your part and therefore increases your trustworthiness in the eyes of lenders and the same reflects in the form of a better credit score.
On the other hand, if you delay your loan EMIs and credit card bill payments, it gives an impression to the lenders that you are not trustworthy enough for loan repayments. Therefore, missing the deadline of your loan EMI or the payment due date of your credit card negatively impacts your CIBIL score.
Whenever you apply for an unsecured loan or credit card, the lender or the card issuer requests your credit report and credit score from CIBIL to determine your eligibility for the loan/card. Too many of such requests give an impression that you are credit hungry. Being credit hungry is obviously an indicator of poor financial health. Therefore, it is advisable to refrain from applying for loans/credit cards very frequently. In case your application is rejected and you are not in urgent need of the loan/card, it is advisable to wait for at least six months before reapplying or applying for another loan/credit card.
If you have a credit card, you are essentially granted a line of credit of the amount equal to the credit limit of the card. Credit utilisation means the fraction of the line of credit you actually used in a given month, that is, the amount of loan you actually availed against the maximum loan amount you could have availed. For example, if the credit limit of your credit card is ₹ 1 lac and you spend ₹ 50,000 in a given month, your credit utilisation for that month is 50%. For a good credit profile, you should keep your credit utilisation below 30%.
The length or age of your credit history also has a significant impact on your credit score. A long credit history shows that you have taken and successfully repaid loans in the past and therefore increases the trust of lenders in you as a borrower. If you do not have any credit history, a good way to start is by applying for a secured credit card which is issued against a fixed deposit that acts as collateral.
Whenever you apply for an unsecured loan or a credit card, the very first metric that the lender or card issuer would check is your credit score. Most banks and other financial institutions rely on your CIBIL score as the single most important criterion to determine your eligibility for a loan (unsecured loans in particular) or credit card.
Your CIBIL score is a number between 300 and 900- the higher the score, the more the creditworthiness of the borrower and therefore the more the likelihood of loan/credit card approval. Usually, a CIBIL score of 750 or above is considered good and makes you eligible for most loans and credit cards. If you wish to check your CIBIL score, you can do that on Finserv MARKETS. Simply enter the relevant details and get your credit report instantly.
A credit score of 750 or above is considered good and makes you eligible for most loans and credit card offers at affordable/negotiable terms and conditions.
It is absolutely safe to check credit score on Finserv MARKETS. Also, since it will be considered a soft credit enquiry, checking your credit score or accessing your credit report through Finserv MARKETS will not have any negative impact on it.
Your credit score is calculated based on the financial history in your credit report, which includes all your active and closed loan and credit card accounts. Since all your loan accounts and credit cards are mapped to your PAN, your credit report is also mapped with your PAN. Therefore, it is mandatory to provide a PAN to check credit score.
Lenders check your credit score to evaluate your creditworthiness, based on which, your eligibility for a particular loan or credit card is determined. Many times, the terms and conditions of the loan also depend upon your credit score.
Apart from you, only bank/NBFCs and credit card issuers can access your CIBIL score and credit report. No unauthorised individual/organisation is allowed to access your CIBIL score.
No, you can access your credit report as many times as you want. We recommend that you access your credit report and check your credit score through Finserv MARKETS as it counts as a soft enquiry and does not hurt your credit score.
Your credit score can fluctuate for a number of reasons including timely/late loan repayment, number of hard enquiries, number of active loans, etc.
Yes, frequent credit score enquiries by banks/NBFCs do have a negative impact on your credit score. Such inquiries are called hard inquiries. However, when you check your credit score through Finserv MARKETS, it is considered a soft enquiry and has no effect on your credit score.
If the borrower defaults on the loan for which you are a co-guarantor, your credit score will indeed get negatively affected.
If you stick to good financial habits, it should not take more than a few months (6 to 12 months usually) to get to a CIBIL score of 750+.
CIBIL updates the credit report and the CIBIL score of the borrowers every 30-45 days.
No, it is not possible to delete any information from your credit report if it is correct. However, if you notice any error or discrepancy, you can ask the respective credit bureau for a rectification.