Only those who have applied for a loan or a credit card knows how important a credit score is. And, it would have been even more eminent after you would have faced rejections due to the poor credit score.
Briefly, credit score is a three-digit number that ranges from 300-850, and to be on the safer side it is better to be on the higher end. Even though all of you want to maintain a healthy credit score that is above 750, but unknown circumstances can turn you down resulting in a poor credit score and thus impact your application process negatively. There’s no doubt that adhering to a higher credit score requires a lot of financial planning and knowledge on the facts, which can boost your CIBIL score, beforehand, but truly the benefits are aplenty.
Credit score and credit report are the two important things that are gateways for a lender—be it a bank or non-banking financial organization—to know your creditworthiness and, therefore, approve or reject your on-going application. Getting credit score is easy today as many of the credit agencies offer Free CIBIL Score as well paid score, as in when required.
It helps to track your credit history on a single pane, at regular intervals and therefore helps you to follow financial discipline on a daily basis, to enhance your score. Using credit history, you can stay away from the debt-attracting factors, improve your credit score and get better loans at best interest rates.
All about CIBIL
CIBIL that stands for credit information bureau India Ltd., the first credit agency company in India, provides credit information report (CIR) to individuals as well as businesses. After CIBIL was incepted in the year 2000, the lenders could easily access the applicant’s past credit report, so as to offer customized loan to each of the customers. Over the years, many credit score offering agencies have come to the forefront. TransUnion International and Dun and Bradstreet are the two technical partners of CIBIL, among both TransUnion International hold 55% ownership of the company.
How to Check Free CIBIL Score?
Every customer can check the free credit score, once a year. Below mentioned are the 8 easy steps that can help you to check the credit score, absolutely free.
- Visit https://www.bankbazaar.com/cibil.html
- Select the option “Get your Score”
- Enter the details like PAN, email address, gender, income type and monthly income. Select the date of birth from the calendar
- Click on the acknowledgment checkbox and hit on “Submit” button
- Next, you have to answer 5 authentication questions related to loans and credit cards
- Once you submit, you will receive an email from CIBIL that will include the control number. This number can be used for further queries.
- After a while, you will receive another email that will include a link and an OTP, used for login
- You should click on the link to check your free credit score in a PDF format
For logging in, customers should compulsorily use the email ID that is registered with CIBIL. Once you have your detailed credit report, you can easily figure out the factors like bad loans, defaults etc. that are impeding your credit score. It is, therefore, important to track the credit score regularly to figure out the factors that can help you thrive your credit score, which otherwise may reject your on-going application.
How To Improve Credit Score
In spite of calculating your Free Credit Score from the credit bureaus online website, often many of you are bewildered between the two terms that are credit score and credit report. Basically, CIBIL report is a detailed report that includes all your transactions like borrowings and payment history of nearly 5 years. Credit score, on the other hand, is a statistical number that credit bureaus generate based on few basic questions and credit report. So, both the terms are completely different and have its own significance.
Maintaining a healthy score is easy for any financially disciplined personnel as all you need to do is pay the bills on time as it influences your score drastically. So, before you apply for a loan never make too many loan application in multiple banks as it gets reflected on the credit report and can drag down your credit score. Also, you should have a mix of credits like home loan, car loan, and others and pay all the bills on time to boost your credit score. Likewise, there are many other factors that help you accelerate the credit score. Adhere to all these, to get a higher credit score.
What CIBIL Credit Report Includes
The credit score offered by CIBIL includes following components in detail that are mentioned below:
Current credit Outstanding: Your credit report is a portfolio where you will get a complete idea of your outstanding credit amount. Referring to it, you can figure out what is the pending amount and how much you need to pay to clear the outstanding amount. It is one of the primary factors that influence your credit score drastically. Ensure to pay all the bills before the last day to avoid debt-trap in future.
Every recent inquiry you make gets marked on your credit report. Enquires are essential but at the same time dangerous. Hence, if you are looking for any loan or credit card, then restrict the number of inquiries as it will get listed on the credit report that can create a bad impression of you in front of the lenders and project you as credit hungry. So, when you plan to apply for an application do minimal inquiries as it turns to be a wise decision.
Current and Past Loans:
This is a section that reflects together all the past and present loans that you have enrolled for. All the lenders use this information to figure out your pending debt amount and your eligibility to clear the due amount, by paying additional EMI every month.
Loan Payments History:
This aspect covers your repayment history about loan as well as credit card payment. Its shows your creditworthiness that is whether you have been paying the borrowed amount on time or not, which in short is termed as DPD (days past due). The term clearly mentions by how many days you were late in paying the loan, 30+ days late payment impacts your credit score negatively. Restrict yourself from doing that.
New Credit Taken:
Any credit card or loan that you would have applied recently gets flashed on the credit report. This helps banks to gauge your current credit taken. Lesser the better.
So, focus on mounting the credit score as it can prove marvelous for your loan or credit card application.