What Is CIBIL And How To Improve CIBIL Score – CIBIL Score Free?

CIBIL Score is your rating with banks and financial institutions based on your record of repaying loans/credit card bills and this also show credit health as well. If your repayment track record is good and you do not have too many loans to repay presently, then your credit score is good, and this makes you an eligible customer for bank loans and credit cards. A good credit score assures the bank that you are capable and responsible when it comes to the repayment of any kind of loan from it.

On the other hand, a bad credit score can be one of the major reasons for the rejection of loans /credit card.

Credit score or CIBIL Score or CIBIL

The CIBIL TransUnion score is a 3 digit numeric summary of your credit history. This score is derived by using the details found in the “Accounts” and “Enquiries” section on your Credit Information Report (CIR) and ranges from 300 to 900. The closer your Score is to 900, the more favorably your loan application will be viewed by a credit institution. The Score plays a critical role in the loan approval process.

How to check your CIBIL Score for free?

Reserve bank of India has mandated on January 2017, that all the four licensed credit information companies provide one free credit score and credit report every year to the individuals. The method to check it is given below-

1. Visit CIBIL website to check your credit score (cibil[dot]com/select-plan)
2. Enter a username (first time users should give unique username), password, name, email address and telephone number
3. Click on Continue to Step 2
4. Enter your date of birth, gender, address and select any of the identity proof such as PAN number, passport number, voter ID card number, driving license number, ration card number and given respective identity proof number in the text box
5. Click on I accept and continue to step 3
6. Enter the OTP (one time password) received in your mobile/telephone number and email ID
7. Click on Continue button
8. Click on Dashboard
9. Your Credit score must be appearing in this page, Your CIBIL Score ranges between 300-900, which is calculated basis the information in the “Accounts” and “Enquiry” section of the credit report. The score should be closer to 900 which indicates your ability to repay the loan.

How to improve CIBIL Score?

Here are some of the methods using them you can improve it-

1. If you’ve done any late payments in recent past then your payment history (and also if late payment is a habit) has a direct and major impact on your Credit Score. Hence, if you have missed payments on any of your existing loans, over the last couple of years, your CIBIL Score is likely to be negatively affected because it indicates that you are having trouble servicing your existing obligations.
2. Make a habit to do timely payments on your credit cards. Avoid high Utilization of Credit Limits of your credit cards (though this does not affect the score but when increased spending on your credit cards continues then it results increased repayment burden and may negatively impact your CIBIL Score). Timely payment of your Credit card bills and loan EMI’s is the primary method for the question How to improve CIBIL score? Better to utilize 30% limit of your credit card and pay on time.
3. A higher concentration of home loans or auto loans (commonly known as Secured Loans) is likely to be more favorable for your CIBIL Score than a large number of unsecured loans (like credit cards and personal loans). Although unsecured loans offer easy access to finance, it’s also by far the most expensive forms of credit. More the number of unsecured loans with high utilization, larger are the payments resulting from its high rate of interest. Avoiding unsecured loan could enhance your credit score and another method of how to improve CIBIL score?
4. If you have made many applications for loans, or have recently been sanctioned new credit facilities, a lender is likely to view your application with caution. This ‘Credit Hungry’ behavior indicates your debt burden is likely to, or has increased and you are less capable of honoring any additional debt and is likely to negatively impact your CIBIL Score. So don’t go for loans every now and then so that you can better your credit score and is one of the most experience methods on How to improve CIBIL score?

If you credit history improves, your CIBIL score will also increase.

Also read: Do You Want Your Credit Score? Get It Free On WhatsApp; Know Everything About It