What is a CIBIL Score?
The Credit Information Bureau (India) Ltd, acclaimed to be known as CIBIL is an authorized credit agency initiated by the Reserve Bank of India (RBI). It checks for the CIBIL scores as well as CIBIL reports for everyone. A CIBIL score is regulated and produced by the bureau after taking into account of a person’s well-elucidated credit data. Added to this, this agency provides credit report services to the banks and apart from that, other NBFC (Non-banking financial companies). A CIBIL score is basically a three-digit number ranging from 300 to 900, where 300 is considered to the lowest score, which also represents the credit worthiness of an individual. Higher the CIBIL score, better the credit history and more responsible is their repayment behaviour.
The basis of calculating CIBIL score is that at least 6 months of historical financial data of an individual is taken into account.
What is a Credit Report?
A Credit Report is a financial document, which is a manifestation of an individual’s credit history with respect to all forms of credit. There are several types of credit or borrowing tools that are incorporated to form a part of the credit report. That includes credit cards and different types of loans, such as personal loan, home loan and car loan. Most importantly, such information is a chronological representation, which indicates that in case, an individual has never taken any loan or never applied for a credit card, his/her credit report shall not reflect any details.
As the credit report shows an individual’s past usage of loans and credit cards, the net worth of the individual does not have any impact on how high or low the credit score of the individual would be.
Why is it important to maintain a good CIBIL score and what are the benefits?
A CIBIL score and CIBIL report is a piece of valued information as it allows the banks and lenders to analyse whether a particular individual is fit for a loan or credit. Having a good CIBIL score makes it easy for an individual to get loans whenever they need one. Here are some more reasons why maintaining a good CIBIL score is important:
- It makes you eligible for loans
- You can request higher limit on your credit cards because of a good credit score
- Avail good discounts interest rates for home loans
- It makes you trustworthy, hence bank lend you loans easily
- You get an integrated record of your credit history
- Having a low credit score makes it difficult for the banks to lend you loans
3 Essential Tips to pertain a great CIBIL Score
A CIBIL score of 750 and above is acclaimed to be ideal. It is considered to be crucial to have a high CIBIL score and also maintain it. This is because it is useful at those times when a loan or a credit card is being applied for. Keeping the CIBIL score on track since the beginning of the year might be beneficial in increasing the chances of getting a loan being approved easily. Having a consistent and healthy CIBIL score is very important. The following are some important tips to have a great CIBIL Score:
- Have Discipline: Credit Card and loan repayments tend to have the strongest impact on an individual’s CIBIL score. Hence, paying all the pending dues on time should be prioritized.
- Low Credit Utilisation Ratio: maintain the credit utilization ratio at 30% for a good CIBIL score. It is recommended to get a credit card with higher peak limit, if there is a constant struggle to stay within the persisting limit of the card.
- Look for Variety: It might benefit an individual to have a good combination of both secured and unsecured debt in lieu of getting a higher CIBIL score. A Credit Card is considered to be an unsecured debt whereas a Car Loan is an instance of a secured debt.
Is there something as a free CIBIL score and report?
Individuals today look for CIBIL score just as a score rather than a concept that is important for the growth and development of the company. In order to encourage people about the CIBIL score, some websites provide CIBIL scores and reports free of charge. You can get your CIBIL score and CIBIL report free by visiting the websites that provide free CIBIL score by creating your account and entering details such as your phone number, email address and the required documents. The website will then give you your CIBIL score within 72 hours of application. Some websites will ask you to become a member in order to get a free CIBIL report and score but the catch here is that you can get a CIBIL Score for free only once year after which if you want to check your score, you need to pay in order to know your score.
How to Get Your CIBIL Score for Free?
Here is how to get your credit report for free. Just follow the aforementioned steps:
- Redirect to the CIBIL’s official website and click on the link to get the free credit report: – https://myscore.cibil.com/CreditView/enrollShort.page
- Register and create your own CIBIL account.
- A form needs to be filled up. Fill out the form with details mentioned below for identity and background verifications with CIBIL:
- Date of birth
- Postal Address or permanent address
- Identity Proof Number. Can be PAN, AADHAR card, passport.
- Read the term and conditions carefully and accept it.
As soon as you accept the terms and conditions, CIBIL will show you your Credit Information Report (CIR) or for some websites it can take up to 72 hours.
As you can get free CIBIL score only once a year therefore, to know your CIBIL score and receive your CIBIL report again in the same year, you will have to make a payment of INR. 550/- for the same. To get an access to CIBIL score and reports in the same year, there are few other paid subscription plans as well, which you can be choosing as per your convenience.