Only those who have applied for a loan or a credit card know how important a credit score is. And, it would have been even more eminent after you faced rejections due to your poor CIBIL Score and credit score.
Briefly, the credit score is a three-digit number that ranges from 300-to 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 above 750, unknown circumstances can turn you down, resulting in a poor credit score and thus impacting your application process.
Undoubtedly, adhering to a higher credit score requires a lot of financial planning and knowledge of the facts, which can boost your CIBIL score beforehand, but the benefits are aplenty.
Know About Your CIBIL Score
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 ongoing application.
Getting a credit score is easy today as many credit agencies offer Free CIBIL Scores and paid scores when required.
It helps to track your credit history on a single pane at regular intervals and therefore helps you follow financial discipline daily 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 the best interest rates.
All about CIBIL
CIBIL, which stands for credit information bureau India Ltd., the first credit agency company in India, provides credit information reports (CIR) to individuals and businesses.
After CIBIL was incepted in 2000, the lenders could easily access the applicant’s past credit report to offer customized loans to each customer.
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 holds 55% ownership of the company.
How to Check Free CIBIL Score?
Every customer can check the free credit score once a year. Below are the 8 easy steps to help you check your 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 PDF format.
For logging in, customers should compulsorily use the email ID registered with CIBIL. Once you have your detailed credit report, you can easily figure out the factors, like bad loans, defaults, etc., 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 ongoing application.
How To Improve Credit Score
Despite calculating your Free Credit Score from the credit bureau’s online website, many of you are often bewildered between the two terms: credit score and credit report.
CIBIL report is a detailed report that includes all your transactions like borrowings and payment history of nearly 5 years.
On the other hand, a credit score is a statistical number that credit bureaus generate based on a few basic questions and a credit report. So, both terms are completely different and have their significance.
Maintaining a healthy score is easy for any financially disciplined personnel as all you need to do is pay the bills on time, which influences your score drastically.
So, before you apply for a loan, never make too many loan applications 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 loans, car loans, and others and pay all the bills on time to boost your credit score.
Likewise, many other factors help you accelerate your credit score. Adhere to all these to get a higher credit score.
What CIBIL Credit Report Includes
The credit score offered by CIBIL includes the following components in detail that are mentioned below:
#1. 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 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 a debt trap in the future.
#2. Recent Enquiries
Every recent inquiry you make gets marked on your credit report. Inquiries 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, which 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 out to be a wise decision.
#3. 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 determine your pending debt amount and your eligibility to clear the due amount by paying additional EMI every month.
#4. Loan Payments History
This aspect covers your repayment history for loan and credit card payments. It shows your creditworthiness, whether you have been paying the borrowed amount on time or not, which is termed as DPD (days past due).
The term mentions how many days you were late in paying the loan. 30+ days late payment impacts your credit score negatively. Restrict yourself from doing that.
#5. New Credit Taken
Any credit card or loan you would have applied for 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.
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