For most people, taking out a loan is something they’d inevitably do at some point. And if you’re contemplating borrowing money — whether to finance your dream house, car or any other expense — you need to establish a good credit score. In India, the specific credit score system used is the CIBIL score. Want to know how to check your CIBIL score? Count on this article as your guide.
What is a CIBIL score?
A CIBIL score is a three-digit creditworthiness metric, ranging from 300 to 900, provided by TransUnion CIBIL Limited. Formerly known as Credit Information Bureau (India) Limited, the organization is the first-ever credit bureau in India.
This score mirrors various aspects of your financial behavior. The following factors affect its computation:
- Payment history. It refers to how timely you pay your loan and credit card repayments.
- Credit utilization ratio. It refers to how much of your available credit you’re using.
- Credit type and duration. It considers how diverse your portfolio is, including secured and unsecured loans. Secured loans necessitate collateral as a guarantee for the loan. Meanwhile, unsecured loans are given without such security.
- Credit inquiry. It refers to how frequent your credit applications are.
Generally speaking, a score of 750 to 900 is excellent, positioning you in good credit standing before lenders. The lower your CIBIL score is, the lower your chances of gaining credit approval are. Anywhere below 350 is considered a low score.
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How to check your CIBIL score
Regularly checking and maintaining a good CIBIL score is essential. After all, it significantly affects your ability to secure credit facilities like loans and credit cards. Follow these steps to check your CIBIL score.
Step 1: Visit the CIBIL website
Different portals help you check your CIBIL score. However, accessing CIBIL’s official website is best for a more accurate score.
Step 2: Provide your information and create your account
On the website, you will be asked to provide your basic information. This includes your name, contact number and email address. This will let the system identify you in the database. You will also need to enter your Permanent Account Number (PAN). In India, the Income Tax Department issues this ten-digit alphanumeric number.
In this step, you must also generate a password to create an account. You must authenticate your account via email verification or a one-time password to be sent to your mobile number.
Step 3: Answer credit history questions
The website will also ask certain questions about your previous loans and credit cards. Be accurate in your responses, as the system will use them to fetch your specific credit information.
Step 4: Select a subscription plan
After this, CIBIL will present various subscription plans for continuous access to your credit report. For one-month access, you will pay $6.60, $9.60 for six months and $14.40 for 12 months. For a one-time free report, simply select “No thanks.”
Step 5: Log into your account and check your score
Use the credentials you created to log in and access your dashboard. From there, you will see your CIBIL score. You can also view a more detailed credit report to gain deeper insights into your credit standing.
Tips to improve your CIBIL score
It doesn’t end in just knowing how to check your CIBIL score. Over time, this metric varies. And if you want to improve your score, you must be financially disciplined. Here are some strategies to follow.
- Pay your bills consistently and on time. Keep in mind that delays or defaults can substantially lower your CIBIL score. To avoid getting overwhelmed, experts recommend to keep your credit utilization no more than 30 percent of your limit. Apart from avoiding getting overwhelmed with how much you need to pay every billing cycle, it helps you signal to lenders that you don’t have a high credit dependency.
- Keep your credit mix diverse. A balance of secured and unsecured loans indicates prudent financial management. Furthermore, note that diversity extends beyond your credit portfolio. Balance your borrowings with earnings to maintain good financial standing. Your borrowings should be within a manageable proportion of your income.
- Regularly review your credit report. Make it a habit to review your credit report for errors. Also, dispute any discrepancies, if any. This will help you pinpoint and correct inaccuracies promptly, ensuring your credit score accurately reflects your financial behavior and history.
Final thoughts
Maintaining good financial health is an important aspect of enjoying a well-lived life. Specifically, keeping your CIBIL score high increases your chances of getting credit approvals. Additionally, it lets you access lower interest rates and receive additional benefits. These perks include pre-approved loans and reduced processing charges.
Bookmark this guide and use it as your reference when you want to check your CIBIL score.
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