A CIBIL score is like a financial report card; it influences your ability to get loans and credit cards. Checking your CIBIL score online helps you stay ahead of your loans and have a good financial journey.
A CIBIL score is a three-digit number ranging from 300 to 900 assess your creditworthiness. Based on your credit history, which includes information about your loans, credit cards, and other debt obligations you get a CIBIL score. Whether you’re new to finance or you checked your CIBIL score online, we’re here to help you understand everything you need to know to start your journey with CIBIL score.
What is the Full form of CIBIL?
The full form of CIBIL is Credit Information Bureau (India) Limited.
It is a credit information company that collects and maintains information on the credit history of individuals and businesses in India.
- CIBIL was founded in 2000 and is headquartered in Mumbai, India. It is a subsidiary of TransUnion, a global credit reporting company.
- CIBIL has a network of over 4,000 lenders, including banks, non-banking financial companies, and housing finance companies.
- CIBIL’s credit reports contain information on a borrower’s credit history, including their payment history, credit utilization, and the types of credit they have. CIBIL’s credit reports are also used by lenders to assess the risk of lending to a borrower.
- A borrower’s CIBIL score is a three-digit number that is used to assess their creditworthiness. The CIBIL score ranges from 300 to 900, with a higher score indicating a lower risk of default.
- Lenders typically use a borrower’s CIBIL score to determine whether to approve a loan and the interest rate to charge.
- You can get your CIBIL score for free once a year from CIBIL. You can also get your CIBIL score from other credit bureaus, but they may charge a fee.
Also Read: Your Habits Can Make Good CIBIL Score For You
Credit Score Range: What is a Good CIBIL Score?
A Good CIBIL score is the reflection of responsible credit behaviour, timely payment and better credit utilisation. When you check your CIBIL score online, you may be given a number within 300-900, based on your credit performances. The number might vary and could indicate your creditworthiness, In the table given below we have presented the entire range and how it will be perceived by the lenders:
| CIBIL Score Range | Creditworthiness Rating |
| 300-499 | Poor |
| 500-649 | Average |
| 650-749 | Good |
| 750-900 | Excellent |
From table above, a good CIBIL score is key for lenders to get a good idea about your credit habits. But let’s go in detail and try to understand that why a good CIBIL score is so important.
Also Read: Know How To Check CIBIL Score Using Aadhaar Card?
Why It Is Important to Have a Good CIBIL Score?
In the world of your finances, having a good CIBIL score is like having a secret weapon. Let’s unravel why this simple three-digit number is so important for your financial well-being.
Boosts Loan and Credit approvals
Lenders use your CIBIL score to assess your creditworthiness, and a higher score indicates that you are a low risk borrower. You are likely to be approved for loans and other credit faster. Reduces loan interest rates.
Lenders typically charge higher interest rates to borrowers with lower CIBIL scores. This is because borrowers with lower CIBIL scores are considered to be riskier borrowers. With a good CIBIL score, you may get lower interest rates on loans, which can save you money in the long run.
Aids in building a good credit
Your credit history is a record of your borrowing and repayment history. A good credit history shows that you are a responsible borrower who has a history of making payments on time. This can help you build a good credit history, making it easier to get approved for loans and other forms of credit in the future.
Get better insurance rates
Some insurance companies use your CIBIL score to assess your risk of filing a claim. A good CIBIL score can help you get better insurance rates, which can save you money.
How to Check CIBIL Score for Free?
You can check your CIBIL score for free once a year from CIBIL. You can also get your CIBIL score from other credit bureaus, but they may charge a fee. However, there are plenty of ways through which you can check your CIBIL score for free-
Through CIBIL’s website:
You can check your CIBIL score for free once a year on CIBIL’s website.
- To do this, you will need to create an account and provide some basic information, such as your name, date of birth, and PAN number.
Through the website of a bank or NBFC:
Some banks and NBFCs offer free CIBIL score checks to their customers.
- To check your CIBIL score through a bank or NBFC, you will need to be a customer of that bank or NBFC.
Through the app of a credit bureau:
There are several credit bureaus in India, such as Experian, CRIF High Mark, and Equifax. These credit bureaus offer free CIBIL score checks through their apps.
- To check your CIBIL score through a credit bureau app, you will need to create an account and provide some basic information, such as your name, date of birth, and PAN number.
NOTE: Your CIBIL score may vary from one credit bureau to another. This is because each credit bureau uses a different scoring model.
If you have any questions about checking your CIBIL score, you can contact CIBIL or the credit bureau that you are using.
Factors Affecting Your CIBIL Score
Your CIBIL score represents more than a mere numerical value; it serves as a fundamental determinant of your financial aspirations. Explore the pivotal factors that can either fortify or jeopardize it.
Delve into the realm of creditworthiness and open the door to your full financial potential. Keeping that in mind, it will be easier to manage your credit profile.
These include:
- Payment history: Your payment history is the most important factor in determining your CIBIL score. Late or missed payments will have a negative impact on your score.
- Credit utilisation: Your credit utilisation is the amount of credit you are currently using divided by the total amount of credit available to you. A high credit utilisation can have a negative impact on your score.
- Length of credit history: A longer credit history will generally result in a higher CIBIL score. If you have a short credit history, you can start by opening a credit card and using it responsibly.
- Types of credit: Having a variety of credit accounts can help you build a good credit history. This includes credit cards, personal loans, and auto loans.
- Inquiries: Too many inquiries on your credit report in a short period of time can have a negative impact on your score. If you are applying for a loan, it is best to do all of your research and apply for all of the loans you need at the same time.
- Public records: Public records, such as bankruptcies and foreclosures, can have a negative impact on your CIBIL score.
- Errors: Any errors on your credit report can have a negative impact on your CIBIL score. It is important to regularly review your credit report for errors and to dispute any errors that you find.
You can improve your CIBIL score by making all of your payments on time, keeping your credit utilisation low.
Also Read: How to Get a Personal Loan with Low Credit Score?
Ways to Improve Your CIBIL Score?
By increasing the length of your credit history, getting different credit, and by avoiding making too many inquiries on your credit report
Here are some additional tips that can help you improve your CIBIL score:
Make all your payments on time
This is the most important factor in determining your CIBIL score. If you have a history of late or missed payments, it will have a negative impact on your score.
Keep your credit utilization low
Your credit utilisation is the amount of credit you are currently using divided by the total amount of credit available to you. A high credit utilisation can have a negative impact on your score. Aim to keep your credit utilisation below 30%.
Increase the length of your credit history
A longer credit history will result in a higher CIBIL score. If you have a short credit history, you can start by opening a credit card and using it responsibly.
Get different credit
Having a variety of credit accounts can help you build a great credit history. This includes credit cards, personal loans, and auto loans.
Avoid making too many inquiries on your credit report
Too many inquiries on your credit report in a short period can have a negative impact on your score. If you are applying for a loan, it is best to do all of your research and apply for all the loans you need at the same time.
Dispute any errors on your credit report
If you see any errors on your credit report, such as late payments that you did not make and dispute them immediately. You can do this by contacting the credit bureau that issued the report.
By following these tips, you can improve your CIBIL score and improve your chances of getting approved for loans and other forms of credit.
We have seen the effectiveness of CIBIL Score and the way it can directly affect our plans. By being vigilant we can avoid mistakes that can affect our CIBIL score.
Stay aware and plan your finances effectively. Proper market research is the key to building a healthy credit report. You can check your credit score with Buddy Score and plan your loan journey effectively.
So, How are you planning your finances? Does our blog help you have a CIBIL score? Let us know on the comment section below!
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Frequently Asked Questions
Q.What is a good CIBIL score?
A. A good CIBIL score is typically 700 or above.
Q.How is CIBIL score calculated?
A. CIBIL scores are calculated based on your payment history, credit utilisation, and the length of your credit history.
Q.What is the CIBIL score for a loan?
A. A CIBIL score of 700 or above is considered good for a loan.
Q.What is the lowest CIBIL score?
A. The lowest CIBIL score is 300.
Q.How to get a 900 credit score?
A. It is possible with an excellent and long credit history.
