CIBIL Score: In light of the times we live in, a credit score is important. This is a score that has relevance when people wish to apply for any financial products, like loans or credit cards, for instance. A credit score, also called a CIBIL score, is a numeric value that has credence in the fields of banking and finance as it gives lenders and financial companies a clue as to what a person’s financial history and creditworthiness look like. A free Credit score can be obtained from the CIBIL website, letting you know where you stand financially.
What is a CIBIL Score?
A CIBIL score is a three-digit number between 300 and 900. If you have a score that is closer to 900, that means your score is on the high side, indicating financial soundness. The CIBIL score is generated by a credit agency, TransUnion CIBIL, and maintaining this score on the upper side is of utmost importance to take loans or apply for financial products. The score portrays a summary of your credit profile and lets concerned authorities (banks and finance companies) know of your creditworthiness. With the score, a report is generated too. In case your CIBIL or credit score is on the low end of the spectrum, you must know how to improve your Credit score immediately.
How to Improve your CIBIL Score Quickly
You can visit the CIBIL website and get a free CIBIL score online, so you know whether you are eligible for any financial products. If you find out that your CIBIL score is low, you can work to improve it fast. Here are some pointers:
- Have a Balanced Credit Ratio – Typically, loans are of two kinds – unsecured and secured. If you take too many loans of one type, say unsecured loans, your credit ratio is not balanced and this affects your CIBIL score adversely. Personal loans are unsecured loans, where there is no collateral to be shown. A balanced credit ratio shows lenders that you have some collateral against which you have taken loans.
- Do Not Settle Debt – You may have credit card debt piled up, but asking lenders to make deals to settle that debt reflects badly on your credit profile. Moreover, if you have multiple forms of debt, lenders (banks and NBFCs) will hesitate to offer you subsequent solutions to settle debts. In case you have other sources of income, like a fixed deposit, you may settle debt through these.
- Limit Loan Applications – An obvious way to maintain a good CIBIL score is to avoid debt as much as possible. If loans are taken, they must be repaid in a timely manner and settled on time. Additionally, ways of how to improve CIBIL score immediately entail that you limit loan applications. CIBIL keeps a note of the frequency of your loan applications and if you send out too many, it shows lenders that you are desperate for a loan.
Preparing for the future is always a good thing and maintaining a good credit score can be helpful to you. In case it is low, you have to improve it as fast as possible.
What is a good score in CIBIL?
Lenders use a CIBIL report when evaluating a potential customer’s creditworthiness. It tells lenders if a person has a history of missed deadlines and whether or not they have a good credit image. There are many factors that can affect a credit score, including a lack of late payments or other infractions. While it is possible to have a good score despite a low one, there are ways to improve it. First, pay your bills on time and avoid delaying payments. Next, make sure that you pay your credit card and loan due dates on time.
What is the difference between CIBIL score and credit score?
If you are unsure about the difference between your CIBIL score and credit rating, read on to find out. Despite the similarities, the two score systems are completely different. While your credit score is an indication of your financial stability and can help you get approved for credit, your CIBIL score tells a different story. While you may not be approved for a loan or credit card if you have a score of -100, this score will not reflect your financial health.