Home Reviews What is a CIBIL score and how you can improve it

What is a CIBIL score and how you can improve it

by Ronil Thakkar
CIBIL Score

In nowadays era, users turn to credit cards and loans to achieve their financial goals and dreams. The CIBIL score plays an important factor and measures in achieving the essential requirement to access credit.

So, What is a CIBIL score, and how can you improve your CIBIL score? Let’s find out:

What is a CIBIL score:

A CIBIL score is a user’s credit score. In other words, it is a three-digit numeric representation of the user’s credit history and a summary of a person’s credit profile. This is based on users’ credit history and transaction behavior, like borrowing and repaying habits shared by banks and lenders with CIBIL on a day-to-day basis of the details that are featured in the user’s CIBIL report.

The Score is based on information found in the CIBIL Report’s ‘Accounts’ and ‘Enquiries’ pages, including (but not limited to) loan accounts or credit cards, payment status, unpaid amounts, and days past the due date. The higher a CIBIL score is to 900, varying from 300 to 900, the greater the probability of acceptance of the consumer’s credit card or loan application.

The past activity of a user is taken as evidence of his or her potential actions, and the CIBIL Score represents the credit-worthiness of a user in line with that. For example, when an individual applies for a credit card or loan, the credit profile of the individual as represented by the CIBIL Score is one of the important factors that lenders review.

TransUnion CIBIL (formerly Credit Information Bureau (India) Limited) has one of the largest collections of customer information and is India’s leading credit information firm. It was created in 2000.

To know more about the factors that impact credit score visit BharatDetails.com

What is a CIBIL Report:

A CIBIL report is a consolidated credit report featuring the CIBIL Score and Credit Report of the consumer, private details, contact details, employment data, and details on the credit account. It is essential to note that both the CIBIL Score and the study are used by lenders to determine the eligibility of a user’s loan.

So, How can you improve your CIBIL score?

  • Always pay your dues on time as late payments are perceived negatively by lenders.
  • Keep your balances low, don’t use too much credit, and limit your usage. And in moderation, apply for new credit. 
  • Maintain a balanced credit balance of secured loans (such as home loans and car loans) and unsecured loans (such as personal loans and credit cards) – too many unsettled loans negatively. 
  • Track monthly for your co-signed, assured, and mutual accounts. Note that you are held equally responsible in co-signed, guaranteed, or jointly held accounts for missing payments, and the failure of your joint holder (or the guaranteed individual) could impact your ability to access credit when required.
  • Over the year, check your credit history periodically. To prevent unwanted surprises, track your CIBIL Score and Report regularly (like a rejected loan application). You will also be alerted to potential inaccuracies, if any, by periodically reviewing your paper. You can log a dispute on the CIBIL website in case you find any inconsistency, or order the lender to report the correction to CIBIL. 
  •  A positive credit profile will make the lender a good bet and pave the way for credit access. Remember to periodically check your credit profile to ensure that when you need it the most, you are credit-conscious and loan-ready.

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