What is the CIBIL Score?
Let’s first discuss how to improve CIBIL Score. The Credit Information Bureau (India Limited) (CIBIL) is a three-digit numerical summary about your credit history.
The CIBIL Score can range from 300 to 900. The maximum credit limit is usually 900. It is a summary of the credit history and credit profile of the consumer.
How does CIBIL Score work?
Your CIBIL Score is one of the most important factors banks consider before granting you a loan or credit card. Customer applications will be approved/rejected based on their CIBIL score.
Your bank may also create a credit report that will use your credit history to evaluate your creditworthiness. You should therefore take the necessary steps to maintain your CIBIL score.
How Does the CIBIL Score Get Calculated?
The CIBIL Score is influenced by four main factors.
Your CIBIL Score is affected by your payment history. Your CIBIL Score will be lower if you miss or delay any EMIs. To maintain a high score, you should avoid this type of payment behavior. Your CIBIL Score will be negatively affected if you default on your EMIs. Sometimes, your score could be reduced by 100 points.
This refers to how much credit you take out in relation to your credit limit. It is recommended that you use 30% of your credit limit. Lenders could consider you a high-risk defaulter due to your high credit card usage. This could lead to rejection of subsequent applications.
When you apply for a loan or credit card, the company will pull your CIBIL report (from the Credit bureau). This is known as a hard inquiry. Multiple inquiries can have a negative effect on your score. It is best to not apply multiple credit lines at once.
High Credit Utilization
Long credit histories indicate that you are proficient in credit management. A high credit utilization limit may indicate a growing debt load over time. This could have an adverse effect on your credit score. You should have a balance between secured and unsecured loans.
How Can I Improve My CIBIL Score
These are the conditions that you must have in order to get the best answer to your question about how to improve CIBIL score.
- Make your EMI payments promptly. Paying late or in default of your EMI payments is considered a negative sign.
- Reduce your credit card usage. Your credit limit should not exceed 30%. This is important if you are applying for a mortgage.
- You can make mistakes when paying the EMIs. Instead of opting to settle, you should pay the amount in full and close the account.
- It is important to check your credit regularly in order to understand your credit situation. This will ensure that you have a clean credit report.
- You should maintain a balance between secured loans (home loan, auto loan) as well as unsecured loans (Personal Loan, Credit loan).
How Do You Check Your CIBIL Score
- Visit the official CIBIL website at www.cibil.com
- Click on ‘Get Your CIBIL Score’.
- Please fill out the form with your name, email ID, password and ID proof.
- Enter your Pin Code, birth date, and number.
- Click accept to continue
- An OTP will be sent to your mobile number. Tap on Continue to enter the OTP.
- Click “Go to dashboard” to check your credit score.
- After the redirect, you’ll be taken to myscore.com
- Click on Member Login. After logging in, you can view your CIBIL score.