Many people struggle to maintain good credit scores. Low credit scores mean an absolute bar on a host of financial products, including loans and credit cards, increase interest rates on the same, and make it hard to manage personal finances effectively. To add to this problem, most people do not know what constitutes a credit score and hence do not know how to improve their creditworthiness.
It is essentially an important factor that helps to calculate one’s credit score. These bureaus collect financial data and then finally arrive at a score, which projects the creditworthiness of a person. This score presents to financial institutions the risk involved in lending money to such individuals. Therefore, CIBIL is that critical part associated with credit evaluation processes.
It is a vital element in calculating one’s credit score. These bureaus collect financial data and thereafter arrive at a score that projects the creditworthiness of a person. This score reflects to financial institutions the risk involved in lending money to such individuals. Therefore, CIBIL is that critical part associated with credit evaluation processes.
That being said, here are some of the key steps toward understanding and improving your CIBIL score: First of all, a credit report should be looked upon on a regular basis for checking errors or wrong information. Irrespective, such discrepancies should be brought to the notice of the credit bureau immediately for rectification, as inaccuracy may dent the score
Second, pay all your bills and EMIs on time. Your credit score is heightened a lot if you are regular in paying your credit card bill and loan installments on or before time. You may set reminders or automate them for the same discipline.
Thirdly, one needs to manage the credit utilization ratio. This comes from the total available credit a person uses at times. Keeping this below 30 percent testifies that you use your credit very responsibly by not being overly reliant on borrowed money at any time.
Another important factor is to maintain a healthy mix of credit. It means having a mix of secured loans, like home loans, and unsecured loans, such as credit cards. Properly managing both proves a person’s ability to handle various types of credit, which has a positive effect on his or her score.
Finally, avoid multiple loan applications or credit card applications within a short period. The inclusion is that each of these applications raises a hard inquiry on your credit report. Having too many inquiries to your credit report within a short period brings down your score.
Step-by-Step Process to Check CIBIL Score
CIBIL Website: Search on Google for “CIBIL score check.” Click the first organic result that will come up; it is the official CIBIL website. The address may appear like cibil.com. Ignore ads. After opening the official website of CIBIL, click on “Get Yours Now.”
Creating Your Profile: Make sure you mention the username, password, and first name, the user details to include here are date of birth, gender, and address details. Provide your identification proof, such as PAN or Voter ID; this will be of much help in the creation of your profile.
Verify Identity: After the creation of a profile, you have to verify your identity. This step is very important for safeguarding your personal information.
Log In: Log in to the member area using the provided login credentials after creating a profile.
You will find a large display of your CIBIL score on the dashboard. In my case, for example, it is 836, as you can see in my earlier clicked snapshot.
Understanding Your CIBIL Credit Report
A credit report has several sections containing detailed information about your credit history. Here is the rundown of what you will come across.
Personal Information: This section contains your name, date of birth, gender, PAN, and also voter ID.
Contact Information: This section contains your address details, telephone numbers, and email IDs. If you have changed addresses multiple times, all the previous addresses will be mentioned here.
Employment Information: The details of your occupation and income will be mentioned here, in case you have applied for loans such as housing loans.
Account Information:
Inquiry Information : This section includes all the enquiries that has been made on your credit history by creditors. This includes enquiries though the loan or credit card was not sanctioned to you. Too many enquiries within a short period of time will bring down your credit score.
Need for a Good Credit Score
Any score above 750 is a good credit rating. You can have increased chances of appreciable loans and credit because it reflects your creditworthiness and responsible behavior in using your money. Key pointers on this include:
NA and NH Indicators: If you see “NA” or “NH” on your report, it simply means you have not generated any credit activity recently. This can happen when you haven’t used any credit cards or taken loans. You use a credit card responsibly to build up your credit history.
Inquiry Effect: Do not flood credit inquiries within a very short period as it may affect your healthy credit score.
