CIBIL (Credit Information Bureau India Limited). A CIBIL Score is a score or rating given to individuals as an indicator of the individual’s credit behavior. The CIBIL score range is 300 to 900 (low to high). The credit score of 750 and above is considered good and is in most cases you are seen as loan worthy. The score below 750 is a pointer of a possible underlying issue in the individual’s credit worthiness.
What is a CIBIL Score/Credit Score report?
These reports are a highly valued information bunch that helps banks and financial institutions analyze an individual’s credit worthiness based on his/her borrowing history and repayment discipline. The major importance of CIBIL reports are:
- Better Credit Score / CIBIL score helps you get loans at much better rates from lenders. A better Credit Score also helps you get offers from multiple lenders – giving you a better deal.
- A unified report with all your past and current credit history.
- A good credit score helps borrowers to get loans easily from banks.
- Credit score reports form the basis of releasing loans to a borrower.
- An exhaustive report to help you nurture better financial discipline.
- Helps in staying clear of debt traps.
Better score on the credit report gives leverage when negotiating interest rates.
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Let’s go ahead with my Do It Yourself (DIY) Guide on how to check CIBIL score\ Credit score online for free. There are three steps to getting free CIBIL score.
- Complete the Form.
- Authenticate Yourself – Here you may be asked 3-5 questions about your loans and credit cards.
- Access your free CIBIL score and report.
Complete Form –
Go to CIBIL Homepage. Reserve Bank of India has directed CIC’s to provide one free credit report in a calendar year.
You will get the below shown page. Here you have to give your Email Address, Date of Birth, Gender and PAN card number. Then enter characters shown in below text box. Now accept the terms and conditions and click on Submit button.
How Is Credit Score Calculated?
The process of calculating credit score begins once the credit information company receives the monthly data from the banks and other financial companies. This data is detailed at an account level, and it captures all customer activities such as repayments, interest rates, new applications, closures of loans, defaults, settlements, etc. This data is then run through complex algorithms that provide the credit score and the credit report.
How to Get a Good Credit Score?
A good credit score in India will be the basic determinant of one’s access to credit. This is because all lenders require a good credit score as an eligibility criteria to grant more credit. You can get a good credit score by paying your bills on time, monitoring your credit usage and avoiding shopping for credit with multiple lenders.