CIBIL (Credit Information Bureau India Limited) is a credit information company that collects and records the credit-related activities of customers across the country. Financial raw data is used to obtain credit scores and credit information reports. The credit scores obtained are in the form of numbers and they determine the creditworthiness of an individual or a company. This information is then provided to banks and other financial institutions in order to help them determine the credit risk of their customers.
The credit score reflects your repayment capacity and spending habits. Therefore, financial institutions check your credit score when you apply for a loan. A good credit score can help you avail a higher loan amount at a reduced rate of interest. On the other hand, a poor credit history affects the chances of your loan approval. This is because lenders consider an applicant with a poor credit score as a high-risk applicant. The credit score provided by CIBIL usually ranges from 300 to 900. Higher the credit more, better are your chances of loan approval. Generally, a CIBIL score of 750 or above is considered to be a good score and several lending institutions would be willing to offer you loan with that score. Whereas, a CIBIL score of 550 or below is considered to be poor and it would significantly hamper your loan eligibility.
The credit score obtained through CIBIL is independent of all the savings including fixed deposits, savings account, etc. You can obtain your credit report with CIBIL whenever you wish. This enables you to keep a check on your creditworthiness.
Since your credit score is a vital factor that decides your eligibility for a loan, it is essential that you maintain a high credit score by making timely repayments and clearing outstanding dues. By improving your spending habits and managing your finances wisely, you can boost your credit score significantly over a period of time.
It is advisable that you check your credit score before applying for a loan. This will reduce the rejection chances of your loan application. However, checking your credit score can hurt your actual score. There are two ways through which you can check your credit score, namely, soft checks and hard checks.
A soft inquiry is a credit report check that does not affect your credit score. Soft inquiries are requested by credit bureaus or Third Party authorized institutes.
Hard inquiries are credit report check that are requested by banks or credit card companies when making a lending decision. Hard inquiries may hamper your credit score.
Understanding how your credit score is calculated will help you improve your score even without necessarily spending more money. It is to be noted that your credit score denotes the financial history of only the past three years.
When you fetch your credit report, make sure that it is error-free. This is because any kind of error in your credit report can damage your credit score, thereby hampering your loan eligibility. Thus, it is always recommended that you must pull your credit report and check for errors. If you happen to spot any mistakes, make sure you sort them with the credit agency and get them resolved. Disputes may arise in case of the CIBIL Score or CIBIL Rank. Incorrect details in a CIBIL Report or a Company Credit Report is also considered as a dispute and can be resolved accordingly.
To check your CIBIL score, you can register on the CIBIL website and subscribe to one of the 3 plans. Mentioned below are the CIBIL score charges and subscription durations for each of the 3 plans.
Basic: Rs.550 per month for a one-time report
Standard: Rs.800 for 6 months. Under this plan, you will receive 2 reports during the subscription period
Premium: Rs.1,200 annually. Under this plan, you will receive 4 detailed reports
Some of the important subscription features are mentioned below:
Figure out how your credit score may vary on your future credit behavior.
Receive customized loan offers depending upon your credit score and profile
Receive a personalized credit score analysis and summary
Track your credit health by monitoring credit score changes
It is to be noted that any kind of savings or investments won’t affect your credit score. The major parameters that impact your credit score are mentioned below:
Your credit history
Utilization of credit
Credit duration and mix
Current outstanding dues
Time credit has been in use
Types of credit available
Application for new credit
Having a high credit score will allow you to obtain a loan with favorable terms and conditions. It is to be noted that improving a credit score is not an overnight thing. It is advisable to provide the lender with a detailed history of good credit. This can significantly increase the chances of your loan approval. Below are a few tips that can help you boost your credit score:
You should make timely repayment of your existing loan.
Clear all your outstanding dues. Extending your credit on a frequent basis can take a toll on your credit score.
Make a note of what type of credit you have. Credit from financing companies can negatively affect your credit score in the long term.
You must try to limit your number of credit applications.
A higher personal credit score would denote your high creditworthiness and repayment capacity. Therefore, if you’re thinking of getting a loan, remember that maximizing your personal credit score is essential to improve your personal loan eligibility. If you have a high credit score, you can consider applying for a loan available at Finserv MARKETS. Loans available at Finserv MARKETS come with competitive interest rates and other attractive features such as easy application, minimal documentation, instant approval and quick disbursal of the loan amount. Moreover, you can also customize your loan according to your requirements. This has added to the increasing popularity of the credit products available at Finserv MARKETS and our personal loan app. Lastly, it is advisable to read all the terms and conditions of your loan agreement carefully before signing it. In case of any query, you must consult a financial advisor to make a well-informed decision.
You can also check credit score by pan card
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 worktowards fulfilling all your personal and financial needs . What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.