CIBIL Report: How to Understand and Keep the Score High with Safe and Smart Saving
CIBIL Report
What is the importance of the CIBIL score?
Any financial institution’s primary purpose is to make loans. To qualify for a lender’s loan products, a person must meet specific criteria.
A borrower’s CIBIL score is one of the essential considerations in determining whether they are eligible for any given loan.
It assists a lender in providing loans to qualified applicants while protecting their interests from loss.
When applying for a loan or a credit card, one must ensure that their CIBIL score is in good standing.
Borrowers must be aware of their creditworthiness because lenders look at the borrower’s CIBIL score when approving a loan application; thus, a good CIBIL score is critical.
Many people, however, are unaware of how regularly they should acquire and review their credit reports.
What is the best way to check one’s CIBIL score?
Let’s define CIBIL (Credit Information Bureau (India) Limited). In India, CIBIL is a significant credit rating agency that assesses your creditworthiness.
India can readily be described as a financially literate country because of CIBIL.
It has improved the transparency, reliability, and structure of financial markets to raise awareness among financial institutions and businesses on how to manage risks and control bad loans.
A CIBIL check is done via the internet. Before giving any loan, banks and financial institutions assess the CIBIL score.
Examine your credit profile regularly to ensure that it accurately reflects your creditworthiness and is free of errors and anomalies.
This allows you to keep track of changes and spot questionable activity. Here’s how to check their CIBIL score online in various ways.
What is a CIBIL score and report?
A three-digit numerical summary of your credit history is known as a Credit Score. The CIBIL Report’s credit history calculates the score (also known as CIR, i.e., Credit Information Report).
A person’s credit payment history over time, spanning loan kinds and credit institutions, is represented by their CIR.
A CIR does not include information about your assets, fixed deposits, or savings.
How do I read my CIBIL score?
A CIBIL Report has detailed information on the credit you have availed, such as home loans, automobile loans, credit cards, personal loan, and overdraft facilities.
You can download the Understand Your CIR document here for your ready reference.
You can also watch a tutorial explaining the various details of the CIBIL Report.
What is a credit score and how do I get one?
A credit score is a number that ranges from 300 to 850 and represents a person’s creditworthiness.
A borrower’s credit score improves how he or she appears to potential lenders.
A credit score is calculated using information from your credit history, such as the number of accounts you have open, the total amount of debt you owe, and your repayment history, among other things.
Lenders use credit scores to assess the likelihood of a borrower repaying a loan on time.
Here are four things you should know about establishing and maintaining a good credit score:
- Your credit score can influence whether you are approved for a loan.
- Your credit score is based on the information in your credit reports.
- Your credit score is determined by several variables.
- Surprisingly, a lot of things have no bearing on your credit score.
Understanding the CIBIL report:
- CIBIL Rating
Your credit behavior as shown in the “Accounts” and “Enquiries” sections of your CIR, is used to determine your CIBIL score, which ranges from 300 to 900. Most people consider a score of 700 or more to be good.
- Personal details
Contains your name, birth date, gender, and identity numbers like your voter’s registration number, PAN, and passport number.
- Contact Details
This section includes addresses and phone numbers; there may be up to 4 addresses.
- Employment Details
Information about monthly or yearly revenue provided by the Members (Banks and Financial institutions).
This section includes information about your credit facilities, such as names of lenders, types of credit facilities (home, auto, personal, overdraft, etc.), account numbers, ownership information, dates of account opening and last payments, loan amounts, current balances, and a record of your payments over the past three years, month by month.
- Question Information
Your CIR is accessed by the appropriate bank or financial institution each time you apply for a loan or credit card.
This is noted by the system and is known as “Enquiries” in your credit history.
Keeping the score high
There are six CIBIL score improvement mantras, as listed below.
- Pay off any loans, credit card balances, or other loans you may have incurred on schedule.
- Avoid using credit excessively. Only apply for credit when you truly need it.
- Keep your credit mix balanced.
- Regularly check the accounts that you jointly co-signed.
- Keep track of the loans you have acted as a “guarantor.”
- Regularly check your credit history and score
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Category: Credit Score
