To build our dream house or to buy a new car almost everyone requires bank loan. Majority of people requires bank loans to grow in their life but to get a loan sanctioned from the banks, the very essential element to get the loan is the ‘CIBIL Score’. CIBIL Score is also known as ‘Credit Score’. All the banks maintain CIBIL score of their users.
The good CIBIL score is usually maintained in between 300 to 900. A good CIBIL score represents a good reputation of a user and it allows the loan process to be easier and quicker as it requires less work due to the good CIBIL score.
What is CIBIL Score?
CIBIL score the credit rating given and calculated by the banks to its users. The full form of CIBIL is ‘Credit Information Bureau (India) Limited’. The score depicts the loan capacity of a user of a bank. The score is given to business, organization or a person based on their monthly expenditure.
How is CIBIL Score Calculated?
The calculation of CIBIL score is totally dependent on the timely ‘Payback of the Loan’. If a loan is paid back within the given time-frame then the percentage will be counted as ‘30% Secured’ or if the loan payment is not done by the time, then the percentage will be counted as ‘25% Unsecured’. The ‘Credit Exposure is counted as 25% and the usage of loan is counted as 20%, while calculating the CIBIL score.
There are a few steps to calculate the CIBIL score. ‘Payment History’, shows the transactions history of the users including, EMI payments or any Default Payments, etc. All these payments set the CIBIL score. ‘Credit Mix’, another element is the Credit Mix which is a mix payment history of ‘Secured and Unsecured’ loan. ‘Frequent Communication with the Bank’, Continuous communication with the bank may result into bad CIBIL score as the bank may think that the user may not be able to pay back the loan at the given time. ‘High Credit Evaluation’, the high usage of given credit also indicated that the loaned money will be used completely.
How Much CIBIL Score is Good for You?
The highest (900) the better, but the score must range above or close to 750. The average CIBIL score ranges in between 550 to 700. Below 550 can make the loan process more challenging.
How to get loan if credit score is bad?
If the credit score is bad and there is dire need of loan, then to apply for loan in NBFC (Non-Banking Financial Company). These companies can provide loans even when the CIBIL score is bad but the interest rates are always higher than usual if loans are taken from NBFCs.
Apart from NBFCs, there are different options available like ‘Gold Loan’, ‘Loan with the help of a Guarantor’, ‘Advance Salaries from financial companies’, ‘Loan in the exchange of Fixed Deposits (FDs), Insurance Policies’, ‘Pier-to-Pier Loading’.
How to improve your CIBIL Score?
Timely payment of any type of bill. Less usage of Credit Card. Maintain a well and fair balance in between the secured loans (home loan, car loan, property loan, etc) and unsecured loans. If your bank account is a joint account, then keep checking the account for the unsecured type of transactions (not done by you) to maintain the balance in the bank account. Check the credit history at aa certain period of time to avoid any errors in the credit history.
Check your CBIL score at a certain period?
A fixed time period of 6 months or a personalized time period of some days or months can prevent any errors or mistakes (done by you / bank or anyone else). A routine check can save the CIBIL score from bad rating.
How to check CIBIL score?
Visit the website of CIBIL at https://www.cibil.com/ and select ‘Get Your CIBIL Score’ option. The next step will ask you to register yourself or open an account (or subscribe with paid or free option). Enter all the essential details and accept and continue. The next step will require verification, an OTP code will be generated to the registered mobile number, enter the code and proceed.
Now, confirm the recent enrolment of your account and you’ll receive a confirmation email on the registered email. Now, select ‘My Credit Score’ option and proceed, which will show the current score of the user.
*(Some CIBIL score checking websites allow free checking and some only allow single checking)
How to register complaint on CIBIL portal?
Visit the CIBIL score website https://www.cibil.com/ and select ‘Register a Complaint’ option. Enter all the details and the complaint and submit to proceed. The complaint will be resolved within 30 minutes as per CIBIL’s rules and regulations.
For how long your CIBIL score record is kept?
The CIBIL keeps the record of past 7 to 10 years as the history of any user.
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One must always maintain a good CIBIL score out of the need of any loan procurement. A good CIBIL score can always get any type of loan with minimum difficulties and in less time. A good CIBIL score also maintain a good reputation of a person in finance world.