Do you know what a CIBIL score is all about? Are you aware of why it is so important?
CIBIL score is an essential factor that gets inspected by the bank at the time of financing. Therefore, it is necessary to understand the way it is calculated. The most important point that you need to know is that the score calculator depends on a persons’/companies’ loan repayment behavior.
CIBIL is basically a three-digit summary of your credit history, which is derived from the account details. This score shows the credit worth on the basis of your borrowing and repaying record. A good CIBIL score increases your chances to get a loan approved.
Moreover, in most of the cases, people with CIBIL over 750 easily get a loan sanctioned. So, the lesson here is that the higher your score is, the better your chances are to get funds from the bank. If you are planning to get a personal loan or credit in any other form then you can easily perform a CIBIL score check online.
The CIBIL score calculations
The factors that have a high impact on the CIBIL score are given below:
- If you have taken a loan from the bank and are making late payments then it will impact your credit score.
- Multiple inquiries for loans will definitely have a bad impact on your CIBIL score. So, if you need a loan, it’s better not to risk your score by doing so.
- A balance between the unsecured and secured loans might possibly have a positive impact on the credit score.
- A higher credit limit reflects the increased burden of debts on you. And, this might be a reason for decreased CIBIL scores in the future.
How to improve the score?
The credit score completely depends on the repayment behavior you follow, but it later lowers your chances of getting approval for credits in the future. So, be careful with your credit and payment habits and this will make or break your credit history.
Mentioned below are a few points using which you can boost your credit score:
- Whenever you take credit, try to repay on time. This is because lenders see it as a negative point in your credit history.
- Try to take as low credit as you can and minimize your usage.
- Keep up the credit mix of unsecured and secured loans in a perfect balance. This is because multiple unsecured loans will drag down the CIBIL score.
- If you have a joint account, then you need to monitor that on a monthly basis. This is because both persons are liable for repayment in case of a joint account.
- Keep a check regularly on your credit history. This will help you keep away from sudden unpleasant situations.
- Pick the correct type of credit card to maintain your score
- Keep a check on your credit limit while spending
- Keep a track of your card expenses and plan to spend accordingly
- Choose cards that have zero percent interest
- Keep looking for new offers on the card
- make complete repayment every time
While you make efforts for achieving the planned fiscal objectives or in an urgent situation, you might require taking credit. So, get certain about the thing that you are always there in the good books of lenders. You can make this happen by monitoring your score on a regular basis.
So, what are you waiting for? Take a step forward to improve your credit score now!!
What credit score is considered good?
CIBIL score ranges from figure 300 to 900. So, if you have a credit score that is close to 900 then it is considered good by the lenders. 750 is considered as the ideal CIBIL score, and if your score is less than that then you have to manage your spending habits and try to improve the same.
Always remember that if you want to have a good credit score then your repayment habit should be good as well. This will help you keep the track record and your score will ultimately get escalated with time. At any point of time in life, you might feel the need to get some financial help, and what could be better and safer than taking credit from the bank. Therefore, to be ready for such situations, always keep a check on your credit score and make sure that you always stay eligible for getting a loan from the bank whenever you need one in case of urgency. These days, there are various options available online through which you can easily get monetary assistance with just a few clicks.