CIBIL score is a concise numerical representation, consisting of three digits, that reflects one’s creditworthiness. It is important for borrowers to know what their CIBIL score is as almost all financial institutions only approve loan applications when applicants have a good CIBIL score.
Having a good CIBIL score improves a borrower’s chances of getting loan approvals at lower interest rates. To know what the best CIBIL score is, how to improve one’s CIBIL score, how to check it, and more one can continue reading the article.
What is the CIBIL score?
CIBIL stands for Credit Information Bureau India Limited. All financial institutions offer credit information of all account holders to this credit rating bureau and get access to the credit reports and scores. Account holder’s credit information includes all the credit history where they have borrowed and repaid a sum of money.
A credit score reflects one’s creditworthiness. If one scores high it means that in the past this individual had borrowed and repaid credit responsibly. It directly impacts how eligible one is for a loan. The best CIBIL score is anything between 700 to 900. It indicates a higher chance of getting greater loan amounts at lesser interest rates.
CIBIL Score Range
The credit score of an individual can range between 300 and 900. Here is how each particular range relates to loan availability:
- Below 600 – Low
- 600 to 649 – Difficult
- 650 to 699 – Possible
- 700 to 749 – Good
- 750 to 900 – Very high
Benefits of CIBIL Score
Here are some of the key advantages of having a good CIBIL score:
- High creditworthiness
- Quick loan approvals
- Access to credits
- Higher credit limits
- Better loan terms
- Lower insurance premium
How to Improve the CIBIL Score?
To be eligible to get an instant home loan approval a borrower can follow these steps below:
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Get all existing debts cleared
An outstanding debt will continue to negatively impact a borrower’s CIBIL report until they repay it. Repaying a debt within the chosen timeline or foreclosing a loan will boost one’s credit score.
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Pay EMIs on time
If a borrower delays EMI payments, it impacts their credit report badly. Opting for an automatic transfer from the bank account is the best option to pay EMIs on time and keep the CIBIL score high.
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Have different types of credits
If one has the ability to manage different types of credit at once, for example, credit cards, home loans, personal loans, etc. it positively impacts their credit score.
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Avoid multiple loan application
A borrower should try to only apply for one loan at a time. Multiple loan applications in a short duration is a sign of ineffective financial planning and will lower one’s CIBIL score.
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Report discrepancies in credit report if applicable
There may be discrepancies in a borrower’s credit report due to a variety of reasons. So, it is best to check one’s CIBIL score regularly.
How to check your CIBIL score?
An individual can follow these steps to check the CIBIL score:
Step 1: Visit the CIBIL’s official website.
Step 2: Navigate and click on ‘Get your CIBIL Score’ at the top right corner of the page.
Step 3: Select a subscription plan.
Step 4: Enter details like date of birth, email, and mobile number.
Step 5: Create a password.
Step 6: Select ID type and enter ID details.
Step 7: Click on ‘Verify your identity’. Correctly answer the questions.
Step 8: At the ‘make payment’ tab complete the process.
Step 9: One can skip the subscription plan if they only want to check the CIBIL score once a year.
Step 10: At the account section login by completing authentication.
Step 11: Fill up the form with the necessary details and submit.
Step 12: After form submission, its dashboard will show the CIBIL score.
Apart from the Credit Information Bureau India Limited, one can also check his/her credit score at a leading financial institution’s website by sharing some basic information.
If one is an existing and long-standing customer, these financial institutions also extend pre-approved offers with competitive rates. To know the home loan eligibility criteria and other features regarding such offers an individual should visit the lender’s website and enter their personal and contact details.
Thus, it is evident how a CIBIL score can impact one’s probability of getting a loan approval. By following the guidelines above one can secure the best CIBIL score and fulfill any financial goals. It will not only improve an individual’s creditworthiness but negotiating power too.
