FAQ On The Credit Score In India
TransUnion CIBIL Limited is an organization that is India’s first such company to provide information on the creditworthiness of an individual. This is done by giving a Credit Score or a CIBIL Score to individuals so that many financial institutions can evaluate the individual’s credit-taking ability at the time of sanctioning any loan or in simple terms, providing credit.
For the sake of further clarity, here are some of the common and widely asked FAQs on the
Credit scores in India:
How is the CIBIL Score is Calculated by the Company?
➔ The credit bureaus gather information on payments made by people and enterprises for credit cards and loans. The available financial institutions like Banks etc, give them these records regularly and depending upon that the CIBIL Score is Calculated.
Why is the CIBIL Score required to get me a credit?
➔ A good CIBIL Score as a spokesperson for the person applying for the loan. It gives the financial institution the security that you will be able to pay back the loan and it will not result in bad debts. Before handing out credit to any person the company needs to calculate their risk to avoid losses and Credit Scores help in doing so. It also helps in determining the credit limit of your credit card.
What score is considered good enough to get the loan sanctioned?
➔ The Credit Score is a number between 300-900. The closer you get to 900, the higher is the chance of your loan getting sanctioned. Hereunder is the bifurcation of what is a good score and what is a bad score:
300-619 - Poor
620-679 - Fair
680-719 - Good
720-749 - Great
750-900 - Excellent
What are the factors that negatively affect my credit score?
➔ Many factors can affect one’s credit score. Some of the most important are:
★ Payment History: How and when you pay off your debts matters. If you delay your payment of previous debts then it can negatively impact your credit score.
★ Taking Multiple Credits: Taking multiple credits indicates that you have an increased credit burden and it lowers your credit score.
★ Type of Credits: If most of your credits are unsecured then it is a bad factor for your score. On the other hand, if you have a fair mix of secured and unsecured loans then that is considered comparatively harmful.
★ Fees: There are certain fees associated with different types of credits taken by the individual, non-payment of these amounts will hurt your credit score.
How do I improve and maintain my CIBIL Score?
➔ For maintaining a good CIBIL Score, one must have a good credit history. Improving your Credit score is a slow process and requires the fulfillment of the following points:
★ Keeping a clean state by regularly paying EMIs on or before the due date.
★ Having a healthy credit mix by keeping both secured as well as unsecured loans at a balance.
★ Having an eye out for the Credit Report and checking for any errors regularly.
★ Avoid taking multiple credits at a time and also avoid making multiple inquiries at a time at several financial institutions.
★ Keeping a clean financial and credit history without any mishaps along the way.
How do I check my CIBIL score?
➔ Here is a list of steps that you can use to check your Credit Score:
★ Step 1: ★ Go to TransUnion CIBIL’s official website and click on ‘Get your CIBIL Score’’
★ Step 2: Fill in the necessary details for Making your account and then verify your identity.
★ Step 3: After filling up the online form, you will be redirected to the Payments page. You can choose among the three subscription options with the minimum one being Rs. 550/-.
★ Step 4: After making the payment, there may be certain security questions that are to be answered for authentication. After answering the questions, your Credit report will be sent to your email ID within the next 24 hours.