►What is Credit score & How to check Credit score online Videos by admin - February 17, 2023March 18, 20240 MORE VIDEOS CIBIL Credit Report: What is Credit score & How to check Credit score online Most of us are familiar with the concept of borrowing and lending. You would have come across at least one person who often forgets to return the money that he/she borrows. This makes you think twice to lend to that person because of their forgetful nature. Similarly, lending institutions would like to issue loans and credit cards only to those who they deem creditworthy. CIBIL score is one of the significant metrics that is used by the credit institutions in India to measure an individual’s creditworthiness. What is CIBIL Score? CIBIL score is one of the most important factors that almost every financial institution check when they receive credit application from individuals. TransUnion CIBIL has affiliations with almost every bank to gauge the creditworthiness of millions of individuals and enterprises. A high CIBIL score denotes not only your excellent financial discipline but also your integrity. Every time you apply for a loan or a credit card, your recent score (last six months) is checked. Generally, any score above 700 is considered excellent, though some banks keep the bar high and some do not mind lowering the standard. CLICK HERE FOR MORE VIDEOS Who Computes the CIBIL Score? TransUnion CIBIL is a credit bureau or credit information company, incepted in 2000, the first of its kind in India. The firm computes the CIBIL score of individuals based on the consumer information stored in their repository. They are known for their accuracy and transparency in the calculation of the score. How to Check Credit Score? Here is the procedure to check CIBIL score: Step 1: Visit the official website of TransUnion CIBIL at https://www.cibil.com/freecibilscore. CIBIL Home Page Step 2: Under the ‘Personal’ tab, click on the ‘Get Yours Now’ button on the home page for a free CIBIL score. You can get a detailed report when you click on ‘Get Your CIBIL Score’ after paying certain charges applicable. Click Score Step 3: Consider that you have opted for a free CIBIL score. You will be redirected to a page that prompts you to enter your personal information to sign up in the first step. The second step in signing up is to verify your identity with a government-issued identity proof document. Personal details Step 4: If you already have an account, you can sign in to your account. Registered member Step 5: Your credit score will be sent to you via the email address you have provided while signing up. What are the Factors that Affect the CIBIL Score? Repayment History Banks and NBFCs consider lousy credit track record as an indicator of future behaviour. Every time you avail loan or credit, the lender is duty-bound to report it to CIBIL. The bank takes note of whether you repay the debt on time. If you make an effort to repay in advance, then it is seen as a positive sign. This shows that you can be trusted to repay the amount you owe. Drastic Increase in Credit As an earning individual, you may have a specific credit limit (whether it is for a loan or credit card). However, using them to the brim indicates credit hungry behaviour and banks see them as red flags. If you maintain a certain credit level each month, but suddenly seen spending significantly more, then it can result in a reduced score. Debt to Income Ratio (DTI) Generally, lenders don’t encourage people to take more debts, say around 40% of their income. So, DTI is used to gauge a loan applicant’s ability to repay based on his/her income. It is an excellent metric to inculcate financial discipline as well as to ensure that you can repay your future EMIs without feeling burdened. Numerous Existing Loans Having too many loans in your name will always be a matter of concern to lenders – like a home loan, a couple of personal loans, a vehicle loan and credit card(s) on top of them. It is always better to close one before availing the next. Focus on closing the smaller loans as soon as possible. How to Get the CIBIL Report? It is very easy to obtain your latest CIBIL score directly from the official website of TransUnion CIBIL. Step 1: Every individual is allowed to check their CIBIL score for free once a year. If you have already used up this opportunity, then you need to select either of the paid plans below: 1-month Subscription – Rs.550 6-monthly Subscription – Rs.800 1-year Subscription – Rs.1,200 Step 2: Enter your personal details as requested in the online form. Step 3: Enter the captcha shown in the box and check the box to accept the terms and conditions and proceed to the payment page. Step 4: After making the payment and authenticating your account, you will receive the credit report in your mailbox within 24 hours. What is the Importance of CIBIL Credit Score? A CIBIL score is like a scorecard for your financial integrity. It is an indicator, which tells a lender either ‘yes, you can give the loan’ or ‘no, it doesn’t look like he/she will repay on time’. The following are the reasons why you should always keep your CIBIL score high. For secured loan approval There is a misconception that it is easy to avail secured finances such as home loans and auto loans, as you will be providing the lender with some security. However, your credit track record will still be looked into by the lender. This is how they decide on the upper limit and the interest rate. With a poor CIBIL score, the overall process can get complicated. Quicker approval of unsecured loans A clean chit from TransUnion CIBIL, when it comes to credit score, is of the utmost significance when you apply for loans without any security. Like personal loans, for instance. For a borrower with a high CIBIL score (say 750+), it is easier to get it sanctioned. If your score is above 800, then you might even get a higher amount than generally given by a bank. More bargaining power on interest rates Are you aware of the fact that the interest rates vary for different loans at different banks? Some people end up getting a better deal than others. A higher CIBIL score enables you to bargain with banks for a better rate or deal. You can easily compare the offers from lenders and authoritatively negotiate as creditworthy customers are assets for any financial institution. A lesser premium for insurance Insurance is another financial instrument that rides mainly on trust and credibility, whether it is life cover, medical insurance, or others. Your repayment history, claims history, and general handling of debts and dues – all these are tracked carefully by the insurance companies. This helps them determine if you can enjoy a lower premium compared to others policyholders with a low credit score. Chance and choice to pick the best credit card Credit cards, if used smartly, can give you a host of benefits. Though they allow a definite zero-interest period, the interest rates can shoot up drastically when you delay or miss a payment. With a better-than-good CIBIL score, credit card companies will vie with one another to give you the best possible deal. Otherwise, you can end up with a credit card with a ridiculously high-interest rate or a rejection. Good Score and Bad Score CIBIL score What it means 850 – 900 Shows that you have never defaulted even once and is an excellent score. 750 – 850 It is a fact that 79% of loans sanctioned are for people with 750+ score. Scores above 800 are considered high and you can easily ask for a lower rate on personal loans and credit cards. 700 – 750 A good score for secured loans. However, for unsecured credit, the bank might investigate further (like social score) or impose slightly higher rates. 500 – 700 This shows that you have delayed or defaulted a few times in the past. Personal loans can be difficult to obtain from a bank. A private financier may levy hefty interest. 300 – 500 Such poor score indicates too many discrepancies in past loan repayments to ignore. Unless you work on credit repair or improvements, it will be impossible for you to get a loan from any bank in the country. How to Improve CIBIL Score? A bad credit score is not the end of the world. You can improve your score by doing the following. You need to note that it will take at least six months to see a considerable change in the credit score and ‘improvements’ on your credit report. Avail your recent credit report This will help you in understanding the current position and where you slipped. For instance, if it is a couple of delayed payments responsible for your low score, then you need to ensure that it doesn’t happen again. It will also help you in correcting errors, if any, or set a target (it has to be at least six months). Never postpone payments The number of procrastinators is on the rise, thanks to the dramatic advances in technology. However, CIBIL doesn’t buy this excuse, and you have to pay your dues and EMIs on time. If not, your score will fall. It is better to automate your payments to avoid unintentional delays. Have a diverse credit-folio This will act as proof to the lender that you are adept at handling different kinds of credit. Having a blend of secured loans (house loan, car loan) and unsecured loans (personal loan, credit card) can do that. A higher leaning towards unsecured loans is not looked upon favourably. Yodha 720px (1GB) Download Don’t have unused credit cards It is never a good idea to keep one or more credit cards idle. If you are scared of maximising the limit, use it for grocery shopping or fuel purchase and repay it at the beginning of next month, and if you do not want to use a particular credit card, then close it. Smart handling of debts If you are handling debts smartly, then the score will improve. For instance, we all know how a credit card works on revolving credit and can get unmanageable if we are not careful. In such a case, closing off credit card dues with a personal loan is a smart move. This means you pay less interest and can solve a problem quickly. No maxing out the credit Just because your credit card allows you to borrow up to Rs.2 lakh, doesn’t mean you do it. You need to ensure that you don’t upset the balance of debt-to-income ratio. Not prolonging tenures The tenure of the loan or credit is another factor that can impact your score. Say, if you have taken a personal loan with a tenure of three years, and have increased the tenure midway for a smaller EMI, it can cause your CIBIL score to drop. Difference Between Credit and CIBIL Score Credit Score A credit score is a three-digit number that sheds light on how well an individual has handled credit in the past. In short, it shows individuals’ creditworthiness. In the modern world, it is very normal to avail credit for various purposes. Credit score can be considered as a progress report of your credit behaviour. Consistently good credit conduct fetches you a higher score (out of 900), while slip-ups will result in a lower score. It will be difficult for anyone to secure a loan of any kind, especially unsecured ones such as personal loans and credit cards with a low score. In case your application gets approved, then it will be at a higher interest rate than usual. CIBIL Score People often confuse credit score with CIBIL score. They wrongly use it interchangeably. The Indian Government has authorised four credit rating agencies to assess credit scores of individuals. They are; TransUnion CIBIL, Experian PLC, HighMark Federal Credit Union, and Equifax Inc. Out of these, TransUnion CIBIL is the most popular credit rating agency. CIBIL score is one of the most important factors that almost every financial institution check when they receive credit application from individuals. TransUnion CIBIL has affiliations with almost every bank, gauging the creditworthiness of millions of individuals and enterprises. A high CIBIL score denotes not only your excellent financial discipline but also your integrity. Every time you apply for a loan or a credit card, your recent score (last six months) is checked. Generally, any score above 700 is considered excellent, though some banks keep the bar high and some do not mind lowering the standard. Frequently Asked Questions What other credit agencies are functional in India? The Indian government has authorised four credit reporting agencies including TransUnion CIBIL. The other three agencies are: Experian PLC HighMark Federal Credit Union Equifax Inc What to do if there is an error in the credit report? If you notice an error in the credit report you can dispute the error on the CIBIL website. Errors in multiple fields can be disputed in a single dispute. How long does CIBIL take to resolve my dispute? Upon submitting the dispute, it may take around 30 days for the organisation to resolve your dispute. Does the score change if I get my credit report from any other agency? There are possibilities for the credit score to change if you get the report from other unauthorised credit report agencies. This is because the proprietary algorithm to generate the credit report may vary from agency to agency. Related Articles: Credit Rating Agencies in India How to Improve your CIBIL Score? Equifax Credit Score CIBIL Registration and Login Process Credit Score CIBIL ALL ARTICLES 5 Tips For Students To Make a Good Credit Score A student has very little opportunity to build a credit score. Some tips and tricks can help one to create a good credit score. Ratings By Credit Rating Agencies May Affect Fixed Deposits The ratings (also called safety ratings) given by the credit rating agencies like CRISIL, ICRA or CARE may affect your decision to invest in Fixed Deposits. How Can Credit Score Affect Your Daily Life? In addition to cases when you are looking for a new credit line, a credit score plays a vital role in many other facets of your daily life. Here is how. How Microfinance Credit Bureau Works in India Many banks and finance institutes hesitate to lend credit to low-income earning individuals. As a result, microfinance came into existence so that it offers small loans. How Do Credit Score Repair Agencies Work? A lower score can have a negative impact on your application. How can you repair your credit score? Can a credit repair agency help you? 11 Myths About Credit Score Due to lack of knowledge, many myths about credit score keep spreading. Here is a compilation of such myths and exposure to reality. Loan Settlement and Its Effects on Your Credit Score Loan settlement’ is a term that is often mistaken for ‘loan closure’. However, they are not the same. Read on to know more. What is Equifax ePORT? Equifax offers a business-to-business e-portal marketplace called ePORT. It offers customers with user-friendly tools that provide bottom-line results. How Credit Card Impacts Your Credit Score? Credit score determines your trustworthiness to a lender. The way you manage your credit card transactions has a direct effect on your credit score. How to Read Your CIBIL Report? You may have received your CIBIL report after applying for it online. In addition, you must also know how to read it. CIBIL Grievance and Redressal Process, CIBIL Dispute Resolution All consumers/entities may not be satisfied with the service provided by CIBIL. In this case, you can raise a grievance and bring the issue to the notice of the higher authorities of CIBIL. Experian Credit Report and Credit Score Experian, one of the several RBI-approved credit rating agencies, provides Credit Information Report (CIR) and credit score to lenders in order to make informed decisions. CIBIL Dispute Resolution Process You can raise a dispute about the errors in your CIBIL Credit Information Report. Multiple errors in a report can be highlighted in a single dispute. Is Credit Score the Same as a Credit Report? Credit score and credit report may seem the same. A credit score is a three-digit representation of your credit report. A credit report is a document that presents your credit history of up to three years. Good CIBIL Score A good CIBIL score makes it easy for you to get a credit facility at a lower interest rate with amenities such as higher loan amount, higher credit limit, longer repayment period, quicker processing time, and more. Know More About Credit Rating Agencies in India Credit Rating Agencies in India is authorised by SEBI. SEBI has permitted only seven credit rating agencies to store, analyse, and evaluate entities’ creditworthiness. How to Improve your CIBIL Score? How to improve your CIBIL Score? ,It is recommended to keep your credit score high and intact as it is profitable in many ways. A score that is on the lower side can be made better if you follow a few guidelines. Equifax Credit Score : What, How to calculate & apply for a Free Equifax Report and Score Equifax credit score is a 3-digit number ranging from 300 to 900 that speaks of a consumer’s creditworthiness. Equifax is a credit rating agency approved by RBI. CIBIL Login & Registration Process for Individuals and Companies You need to register with TransUnion CIBIL and log in to your account to get credit report for individuals and companies. Here is the procedure for CIBIL Registration & CIBIL Login What is Credit Score? Credit Score is a measure of a person’s capability to pay back a debt, creditworthiness. A credit score ranges between 300 - 900 points. Check this article to know how to improve credit score. CIBIL Score CIBIL Score has a big say on your credibility as a borrower. If you want banks and NBFCs to approve your loan application, it is important to build up a respectable score. CIBIL: Overview & Product Offerings Building and preserving a good CIBIL score isn’t a rocket science, however, people tend to mess up their credit usage which does a substantial harm to CIBIL score. Read more about CIBIL, its products and most importantly how to obtain and maintain a good CIBIL score here.