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What is the CIBIL Score?

By Finserv MARKETS - Dec 25,2019
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CIBIL score

Your CIBIL (Credit Information Bureau India Limited) score measures your credit history in the form of a three-digit number. This number is derived using the details found in ‘Enquiries’, and ‘Accounts’ divisions of the CIBIL report. This, among other things, includes – loan accounts, credit cards, any outstanding payment, delayed payments etc. In other words, the CIBIL score reflects your creditworthiness using your borrowing and payment past.

The score range lies between 300 and 900, with a higher number denoting a healthier credit profile. A higher number helps build confidence among lenders, while a lower score can decrease the chances of a successful loan application.

CIBIL score

Source: smejoinup

Factors affecting your CIBIL Score

Four key factors impacting your CIBIL Score are:

  1. History of Payments: Not repaying borrowed money harms your CIBIL Score. Hence, it is advised that a borrower must be financially disciplined to be able to take loans in future with ease.
  2. Mixing your credit: Having a balanced mix of secured (loans which require collateral) and unsecured (loans which do not require collateral) loans can positively impact your CIBIL score.
  3. Multiple enquiries: Multiple loan enquiries suggest that your loan burden in the future may expand. Hence, it’s advisable not to apply for a loan unnecessarily.
  4. High credit utilization: It is indicative of an individual spending a major chunk of monthly income on debt payments. This often puts the person at a higher risk of defaulting on their payments.

How to Maintain a Healthy CIBIL Score?

  1. Pay your dues on time:

Cases of late payments that are reported to credit bureaus diminish your credit score. Hence, instil a healthy habit of managing your bills that will eventually strengthen your financial discipline.

  1. Checking CIBIL report regularly helps.

Financial experts believe that everyone should review their credit history intermittently throughout the year. It also helps in correcting any discrepancies or errors in your CIBIL score. There have been many instances reported by the borrowers where their CIBIL score was found to be low for no fault of theirs. Hence regular checking of your credit score can help you avoid unpleasant surprises – like a loan application rejection. You can check your CIBIL score online on Finserv MARKETS for free and get a full financial health report in just three quick, easy steps.

  1. Limiting loan exposure.

An individual with a higher loan exposure is seen with a sordid lens and is hence often, given a lower credit score. Try to limit loan exposure to keep your score stable. Prioritizing your financial needs to avoid multiple loans helps an individual in maintaining a good credit score.

  1. Healthy Mix of Secured and Unsecured loans.

If taking multiple loans becomes a necessity, try maintaining a balanced mix of secured and unsecured loans. An individual with a high exposure of unsecured loans is seen in a negative light. The personal loans available on Finserv MARKETS require no collateral and have flexible repayment tenures ranging from 12 to 60 months at affordable interest rates starting at 12.99% p.a.

  1. Limiting applications for new-credit.

Whether for a new credit card or a loan, too many credit enquiries negatively impact your CIBIL Score. So avoid unnecessary applications and only fill a form when it is necessary. You must know that even opening a new credit card lowers your average credit age by almost fifteen per cent.

  1. Monitoring co-signed and joined accounts regularly.

Partners in join-accounts or co guaranteed loans must always remain careful and alert all the time. Such individuals are held equally liable and responsible for missed payments of their partner. Such negligence can hinder your ability to take credit in future.

Although a good financial credit score eases up your loan application process, owing to a few genuine and legitimate reasons, sometimes you may lose your good credit score. On Finserv MARKETS you can check your credit score for free and eligibility and avail a tailored loan, according to your needs. With zero collateral and minimum documentation, the application process is smooth, quick and convenient.

Also read steps on how to check CIBIL Score by pan Card

Also read how name change can affect credit score only at Finserv MARKETS

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522