What is CIBIL Score: You must have often heard this in which the bank asks what is your CIBIL score. And many times the bank refused to give loan or refused to give credit card because of CIBIL score. On the other hand, due to the CIBIL score, many people got loans at very low interest rates. Today we will get complete information about this CIBIL score, what is CIBIL score and how much CIBIL score should be.
What is CIBIL score and how much should it be
What is CBIL
CIBIL (CBIL) is the primary credit reporting agency in India. This agency keeps complete data of credit rating like loan and credit card of all Indian citizens.
full form of CiBIL
The full form of CIBIL is Credit Information Bureau (India) Limited. This credit rating agency CBIL was started in the year 2000 in India.
This company has license from Reserve Bank due to which this company holds credit data.
what is cbil score
If you have a PAN card in India, then the transaction number of all the bank accounts, loan accounts and credit cards linked to this card remains linked.
Now if you do any transaction in these accounts, then that transaction also gets registered on CIBIL’s website.
So if you default or are found guilty in any of these transactions, your CIBIL score gets reduced. Similarly, if you complete your EMIs, your credit card bills and loan amount at the right time in the right way, then your CIBIL score keeps on increasing.
how much is cibil score
So as I told you CIBIL is a number. This is a three digit number.
This number varies between 300 to 900 for each person, so you can understand that the higher the CIBIL score, the better.
We will talk further about its range.
How is CIBIL score calculated?
The calculation of CIBIL score is done by TransUnion CIBIL Limited. Various tests are done to calculate CIBIL. But there are 4 main ones. Which is responsible for making your CIBIL score good or bad. The initial calculation is done from these.
1. Payment History
Late payment or non-payment of any EMI. Non-payment of any bill. Declaring yourself a defaulter. Any such action can badly affect your CIBIL score.
2. Credit Mix
It is better to have a healthy mix of secured loans (like home loans, auto loans) and unsecured loans (like personal loans, credit cards). You should not always take any one type of loan. You should always take secured loans and unsecured loans. This has a positive impact on your CIBIL score.
3. Frequent inquiries
You should not make repeated inquiries for any loan. This gives the message that you are going to need more loan in future. Or your financial condition is not right. In this case your application may be rejected. Rejecting the same application reduces your CIBIL score.
4. High Credit Utilization
High credit utilization means that the burden of debt is going to increase on you in future. Which is not a good sign. That’s why you can take small loans for a short period of time. This creates a good coordination between you and the lender. Which also improves your score.
How to check cibil score?
There are many websites available to check CIBIL Score like Paisa Bazaar, Bajaj FinServ etc. But TransUnion CIBIL Limited is the official website to check CIBIL. TransUnion CIBIL Limited is licensed by RBI.
- First of all you have to go to CIBIL’s website https://www.cibil.com/. Then click on the “Get Your CIBIL Score” button at the top right.
- After that you will come to their subscription page. If you want to check CIBIL score for free, then you have to scroll down and click on “Click here to get your free annual CIBIL”. (You can also go directly to this page by clicking here)
- Here you will have to enter your email ID, name (for this account it will be your username), password, ID proof (such as PAN card, voter ID, passport number, Aadhaar), date of birth, pin code and mobile number. After filling these details, click on ‘Accept and Continue’.
- Then you will get an OTP on your mobile number which you will enter and click on “Continue”.
- Now you will see a message “You have successfully enrolled!” Below this you have to click on “Go to Dashboard”.
How to Improve CIBIL Score? How to increase cibil score?
If your CIBIL score is bad then you may face difficulty in availing loan. That’s why your CIBIL Score should always be kept fine. Now the question is how to increase CIBIL Score? For this you have to follow the 6 points given below. So let’s know how to improve CIBIL score?
1. Timely payment of dues.
Always pay your dues on time. Like loan installment, credit card bill etc. If you forget to make any payment. For which you are charged penalty or late payment charges, it has a negative impact on your CIBIL score. So pay all dues on time.
2. Keeping the credit balance low.
You should always try to take less loan than you do. And even if you have to take a small amount for a short time, and finish it by paying it on time. This has a good and quick impact on your CIBIL score.
3. Always keep the credit healthy.
Keeping credit healthy always means that you do not make any payment that affects your CIBIL Score negatively. Like you pay a bill on which penalty or late payment charges have been imposed. Such bills will reduce your CIBIL score. On the other hand, when you have paid for it. So always keep your credit healthy.
4. Applying for new credit at the right time.
If you have any loan going on at present. So taking a fresh loan should be avoided. You should try to pay off all your existing loans on time and then apply for a new loan.
If you apply for a new loan and the lender rejects it. So you apply it again after some time. Repeated applications in a short span of time also have a negative impact on your CIBIL score. Normally you should keep a gap of at least one month for reapplying.
5. Monitoring all your accounts every month.
You must check the report of all your accounts every month. Sometimes it happens that some small charges are imposed by the banks. About which we do not know. That’s why you should check all your accounts from time to time. If there is any mistake, then immediately contact your bank and get it rectified.
6. Keep reviewing your credit history frequently throughout the year.
You must check your CIR (Credit Information Report) once a year. Otherwise, it may also happen that when you need a loan, your CIR is at a very low level, and you have to face trouble.
Who issues your CIBIL score?
TransUnion CIBIL Limited aggregates all credit information in India. All banks or credit companies in India give the data of all their customers to TransUnion CIBIL Limited.
After that TransUnion CIBIL Limited checks the financial history of the person and then issues the CIBIL Score. All the records of the customers have to be given to the banks and other lenders every month. Hence the CIBIL score of the individual is updated every month.
What information is in a credit report?
A credit report contains a record of all your credit transactions. It contains information about all the loans taken by you. There is also information about all the credit cards you have taken. Let’s see.
- All loans taken by you.
- All the installments paid by you.
- All terminated loans.
- Details of all installments (paid on time and paid late)
- All types of credit cards.
- Give the details of the EMI of the card.
what should be your cibil score
Your CIBIL score depends on all your credit transactions. That’s why your CIBIL score should be good.
If you need a loan or credit card at the right time, then people whose CIBIL score is above 750 get it immediately.
So always try to keep your CIBIL score above 750.
In this way, CIBIL is a number which ranges from 300 to 900. People whose CIBIL score is below 750 do not have the correct CIBIL score. This means that banks do not give loans and credit cards to those people in the coming times. Even if they are given a loan, it is often given at a higher rate of interest. On the other hand, those whose credit score is more than 750 are considered very good.
What should be the range of CIBIL score?
As you know the range of civil score is between 300 to 900. In which 900 is considered the best and is the highest. A responsible person always gets a CIBIL score above 750. It has the following CIBIL score categories.
1. NA/NH CIBIL score
If you do not have any credit history then your score is NA / NH. It simply means not applicable and no history. If you have not taken any loan and do not have any credit card then you have this score. If you want to increase your credit score, then you have to make a credit history, for this you can use any credit product like credit card or loan.
2. 350 to 549 CIBIL score
People whose credit score is between 350 to 549 is considered to have a good CIBIL score. This means that you have been unable to pay your credit card bills or loan EMIs. With this kind of civil score, you will find it very difficult to get any other credit card or loan. Because you become a high risk customer and your chances of becoming a defaulter again increase a lot.
3. 550 to 649 CIBIL score
If your CIBIL score is between 550 to 649 then it is considered as high CIBIL score. Still, there are many lenders in India who may refuse to give you a credit card or loan with this score.
This CIBIL score means that you are not paying your bills on time. Even if you get a loan with this CIBIL score, you get a higher interest rate. If your CIBIL score is in this category then you should first increase your CIBIL score. And only after that apply for loan or credit card. So that you can get loan at low interest rate.
4. 650 to 749 CIBIL score
If your CIBIL score is in the range of 650 to 749, then you are moving in the right direction. You should keep showing your good credit behavior. This will increase your score more. The advantage of having this credit score is that all lenders can offer you loans while at the same time you still have the negotiating power to negotiate the interest rate.
5. 750 to 900 CIBIL score
It is considered to be the best civil score. This means that you have made your credit card payments on time and regularly. And he has also paid his loan on time.
This makes for a very impressive payment history of yours. The advantage of this is that all banks can offer you their credit cards and loans.
And with these banks, you are considered to be the lowest risk customer on interest and you get the loan at the lowest interest.
what should be your cibil score
The CIBIL score of any person ranges from 300 to 900. The best in this is considered when your CIBIL score is the best or the highest. The range of 300 to 599 is considered very dangerous. And 750 to 900 is considered the best.
So your CIBIL score should be above 750.
So in this way you have got complete information about CIBIL score from here, what is CIBIL and how much should be your CIBIL score.
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