CIBIL is also known as Credit Information Bureau (India) Ltd, and is one of the most authentic agencies that tell customers about the maintaining the healthy credit score. Agency collects information of transaction record, loan history and other records to help them to get their exact CIBIL score. Agency collects the records and represents them in form of CIBI credit score and sometimes it is known as credit information report (CIR).
Major credit agencies and bureaus like Dun, Bradstreet and TransUnion International since it came into existence in 2000 and making credit score calculation easy.
CIBIL score or credit score refer to certain criteria of numerical digits that reflect to bank credit history of customer. This score specify the value of entire transaction that you have made through that account. It will also reflect that credit used and repaid by you. Here, user will also get information about ever happen transaction related mistakes and tip to increase the creditworthiness. CIBIL will display all your transaction records and other useful details.
Intensive in-house algorithm calculations approach is used to determine the credit score of customers. Credit Information Bureau or CIBIL calculate the score on scale of 300-900, where 300 is lowest credit score and 900 is best credit score that depends on individual records. To calculate the score in free, agency put last 6 month transaction record of individual and put that record in 258 different variables with specific feature then processes it for final calculation.
Other renowned agency that calculate the score in free are Equifax, Crif Highmark and Experian. These agencies are approved by the reserve bank of India (RBI) and liable for calculating the financial records and score of financial organization. Calculation of CIBIL score is based on following facts:
a. Loans as Proportion of income.
b. Record of complete transactions.
c. Loan equities.
d. Previous score, credit score and loan record.
e. Credit card and unsecured vs. secured loan.
As we all know that CIBIL calculate the score on criteria of 300-900. In this range there are several score will appear on report as per individual bank creditworthiness? Some of them are
1.0-1 This credit score represent that your credit history is almost null and you have not earned the credits.
2. 350-550 this score specify that you will not be able to apply for new credit card or loan because this score card reflect your poor credit history and repayment record.
3. 550-650 this score card represent that you are your score is quite ok and bank can trust you for new credit card or loan.
4. 650-750 if your credit score belong to this criterion then there will be no issue in approval of new credit card and loan.
5. 750-900 This is excellent score and if your credit score belongs to this criterion then you can apply for new credit card and loan quite easily.
1. It helps in cultivating financial discipline.
2. It helps in analyzing your true financial standing and make plans for future finances.
3. You can be on top of your borrowings and avoid debt traps.
4. With a CIBIL score in hand, you are in a great position to make decisions regarding availing new forms of credit.
a. Helps to avoid over leveraging.
b. Approved limit can be properly used.
c. On time loan EMI payment.
d. Requesting and maintaining a copy personally rather than through financial institutions.
e. Regular bill payment of credit card.
f. Maintaining strong financial record.
g. Ensuring banks and other financial institutions you are dealing with record and submit positive information to CIBIL.
a. Multiple applications for unsecured loan getting rejected.
b. Too many credit report enquiries by banks and other institutions.
c. Too much unsecured credit such as multiple personal loans.
d. Irregular loan repayments.
e. Cheque bounces/dishonours.
f. Errors in record by banks and other finance institutions.
g. Defaulting as a guarantor
1. Easy processing of credit card and loan.
2. User may get concession in processing fees and other charges, although it is not mandatory.
3. If CIBIL score is more than 700 then your credit card request must be approved quite easily.
4. Negotiation in interest rate possible with higher interest rate.
1. Go to official portal of CIBIL and click on KNOW YOUR CIBIL SCORE.
2. Fill all the mandatory details in form and go for next step.
3. Now you will be redirected in payment gateway page, here you can select payment mode as per your interest and pay the fee decided by the CIBIL.
4. Now, you will be redirected to user verification section, where they need to answer few account security related question for further processing. Minimum three answers must be correct and then CIBIL will forward your report in your email within 24 hour of security related validation.
5. If due to any reason you fail in online authentication then do not worry, send your information in offline mode along with required documents and get your CIBIL score.
Document that provides complete information about your entire credit, transaction history along with repayment details is known as CIBIL or Credit Information Report (CIR). In current time, it is quite important to know your credit score before applying for loan or credit card. CIBIL is the first agency in India in this category, apart from this there are several international organizations or agency like Experian Credit Information Company India Pvt Ltd. and others are offering excellent services.
CIBIL score is just part of that report that reflects to your creditworthiness till that date whereas your report will consist of overall transaction record of account. In simple words it can be said that CIBIL report is your mark sheet and CIBIL score is percentage that you have earned. Always maintain healthy score card and your score must be more than 750 to avoid any bank related issues.
Loan as Proportion of Income
a. High loan balance reduces your score.
b. Low loan amount refers to healthy credit usage and higher credit score.
a. Many loans enquire to avail loans indicative belongs to culture hunger that may impact your score negatively.
Track Record of Past Payment
a. Delayed recent payment refers to negative score card.
b. Records of all previous payments.
c. Continuous payment lends towards higher score.
d. Delayed payment leads towards lower credit score.
Unsecured vs. Secured Loan
a. Higher loan amount causes lower score.
b. High credit card balance causes lower score.
Default, Write-off and Previous Settlement
a. Multiple write off leads to lower score.
b. Latest Write off leads to negatively than other factors.
c. Delayed or defaults on loan payment offers negative impacts in comparison of unsecured loan.
d. Write offs documented by lenders on previous debits.
a. Seek Variety: A combination of unsecured and secured debt will help you to boost your CIBIL Score freely. As we know that car loan is secured debit and a credit card is unsecured loan.
b. Be Disciplined: Loan and credit card have solid impact on growth of credit score. If someone is paying all dues on time then it will be beneficial in credit or cibil score boost up.
c. Be Frugal: To get higher score always keep your credit utilization ratio at 30%. If due to any reason, you are facing difficulty in credit utilization then look for higher credit limit offering credit card.
a. Apply for a Consumer Durable Loan: It can be said that this is one of the most effective and easiest way of boosting CIBIL score positively.
b. Personal Loan: If individual always repay the amount on time through their saving account then it will help to gain score with ease.
c. Rent: credit agency also consider the fact about the amount that you repay to your landlord and it will also make gaining score positively.
d. Apply for Small Loan: Applying for small loan amount will help to boost your score efficiently as individual can easily apply for loan where they have they saving account and repayment of amount always gives positive impact to make things easier.
e. Contact Utility Provider: If individual have purchased TV, Mobile or other accessories and paying EMIs on time then companies will send positive report to bank to help in calculation as well as hike of score.
1. GO to official website of cibil i.e. https://www.cibil.com/
2. Click on Get your credit score or to visit directly https://www.cibil.com/creditscore/ directly
3. If applicable choose the method of subscription.
4. Enter your PAN card number along with registered email address.
5. Enter your date of birth (DOB) and select your gender.
6. Enter the security based captcha code.
7. Check the terms and condition page option then
8. Click on Proceed to payment.
Payment History – We all have got scolded by our parents for not paying our bills on time and it is true in today’s world more importantly than ever. Late EMI payments or default repayment history can leave a negative mark on your credit report forever. Instant gratification will have long term repercussions. Negative factors generally remain on credit reports for at least next 7 years, though bankruptcies records can stay on for longer.
Debt Level – By now, you might have understood that each borrowing contributes to your credit history. Isn’t it right? Here debt level is determined as how many loans you have taken simultaneously and how regular you are at paying them back. Hence, it is significant to make a balance between your income and borrowings to make sure that you repay them regularly.
Span of Credit History – A good credit history is not created overnight and thus, takes time. In some cases, it might even take several years to build a good score, and sometimes over 10 years to build an excellent one. Therefore, it is completely upon you how well you manage your credits and finances.
Inquiries – Multiple frequent inquiries can impact a negative impression over your credit score and the latter may not even know.
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