What is CIBIL Score| North Loop Official Blog
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16 Sep 2020

What is CIBIL Score

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What are credit scores?

A credit score is a numerical expression of a creditworthiness of an individual, calculated based on the credit history and timely repayment of a loan taken previously. Financial institutions calculate credit scores of individuals and go through a detailed analysis of the creditworthiness of individuals before sanctioning a loan.
Banks, financial institutions, or any other money lenders take credit scores approved by RBI into consideration and it is absolutely vital for one to maintain a good credit score. Even if financial institutions do make the decision of sanctioning loans to people with low credit scores, the rate of interest charged on loans would be through the roof.
Credit scores need to be built with the same amount of importance as any other credible facet of personal development as a good credit score always comes in clutch during financial emergencies. They also mirror an individual’s financial health, repayment capacity, and reliability.
Certain companies employing individuals also have a robust framework in place that does a detailed analysis of one’s credit scores before considering that individual’s employment opportunities at the company.

What is a CIBIL score?

Credit Information Bureau (India) Limited or CIBIL Score is a three-digit numeric summary of one’s financial history, which is also derived from a Credit Information Report.
An individual’s credit score ranges from 300 to 900, with a 300 - 500 range credit score implying a very poor credit history and 750-900 implying a healthy credit history.
Banks, financial institutions, and other money lenders consider offering a wide range of loans, credit cards, and other financial products for individuals with a credit score of 750 and above.

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How to check CIBIL score?

My CIBIL score can be checked on the CIBIL website for free or with a membership bundled with additional benefits. You can also check your credit score on third party portals such as Bajaj Finserv, Bank Bazaar, etc.
One would require a to go through a full KYC (know your customer) procedure in order to obtain a credit information report (CIR) from CIBIL. PAN card, registered mobile number, and registered email ID are required for the same. This report would contain all the details pertaining to one’s credit history across various lenders and products such as home loans, vehicle loans, personal loans, credit card history, etc.
A CIBIL score would also contain personal information such as name, date of birth, identification numbers such as PAN card, Aadhar Card, Voter ID, etc. provided a full KYC procedure has been completed, contact information such as address and contact numbers, employment information, account information such as bank accounts, credit facilities, current balance, loan outstanding, etc.

How to improve CIBIL score-

Given below are some of the important factors that help improve an individual’s credit score-
  • Timely repayment of loans- Repaying the EMI’s of loans or the dues on or before the stipulated due date can significantly improve credit scores.

  • Limited utilization of credit balance- For any individual, a fair amount of credit balance can be very tempting and immediately converts a person’s wants to needs. This psychological entrapment can take a massive toll on an individual’s credit score. An individual needs to limit his credit utilization to bare necessities and for rainy days only, which helps increase credit scores.

  • One needs to maintain a fairly high credit age, which is the time gap since the first loan sanctioned.
  • Avoiding multiple credit lines and loans help increase an individual’s credit scores. Having multiple loans outstanding reduces one’s capacity to repay loans on time.

  • Paying off bad debts or any unpaid dues helps to remove the negative implications on a credit report, paving way for a better credit score.

  • Reporting any errors or discrepancies on credit reports to CIBIL can help rectify any errors on their end and improve credit scores.

A positive credit health paves way for access to credit products offered by financial institutions as well as other money lenders. One must always keep tabs regularly on their credit reports and always strive to maintain a good credit score.

North Loop provides a wide range of credit-lines such as personal loans, overdraft on FDs, credit cards, education loans, and new immigration loans for Indians as well as Non-Resident Indians (NRIs) at some of the lowest interest rates, with some credit lines not even requiring a credit history. Sign up today and realize that dream of yours!

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.