Home Business CIBIL Score: What Is A Credit Score? How To Check Mine For Free? Find The Benefits Here

CIBIL Score: What Is A Credit Score? How To Check Mine For Free? Find The Benefits Here

by Hassan

A Credit Score is a three-digit number that lenders use to determine whether or not to approve your loan application. It assists them in making an informed lending decision. Your credit score ranges from 300 to 900 points, with 750 being considered a good credit score for getting the optimum credit and loans. 

Your credit score and credit information report are generated by credit bureaus. There are four authorized credit bureaus in India; CIBIL, Equifax, CRIF High Mark and Experian. A consumer is entitled to one free credit report per year that they may request from any of the 4 bureaus. They may also request their credit score at the same time. 

Credit Information Bureau India Ltd or CIBIL™ is India’s first credit information bureau. It was established in the early 2000s and it is one of the 4 major credit bureaus in India. Other credit rating agencies such as Experian, Equifax and HighMark soon followed.

CIBIL™ is a credit bureau that collects and maintains information regarding individual consumers. It monitors, records, and stores data related to debtors’ loans and credit cards. Banks and other lenders send records to CIBIL™ on a monthly basis, which are used to generate a score for each individual. This score is known as a CIBIL™ Score.

What Is The Importance Of Credit Score? 

Despite the fact that banks and NBFCs offer a wide range of loan products, these loans have tight qualifying restrictions. When it comes to determining your credit eligibility, your credit score is crucial. 

Your credit score is a vital factor in evaluating your credit eligibility. Your credit score plays an important role in the credit market enabling borrowers and creditors alike to access the much required credit for themselves.

Also Read: How To Build Your Credit Score From Scratch

How To Check Credit Score For Free? 

Individuals are entitled to one free credit report, as well as their credit score, from any of the credit agencies, according to RBI guidelines. CreditMantri, on the other hand, provides a free credit score as well as a full credit analysis report to assist you in making an informed selection and discovering the finest credit products for your needs.

Your CIBIL™ score can be obtained directly from the CIBIL™ website or via CreditMantri. The procedure is straightforward; you simply need to provide your phone number, PAN number, and a few other details such as your name and email address. After that, CIBIL™ will compile your credit score as well as a complete credit report for you to review. The procedure is the same for the other three credit bureaus. 

Click here to get your credit report from CreditMantri now!

Why Is My Credit Score Important For Obtaining Loans And Credit Cards? 

The lender analyses the applicant’s credit score and reports once he submits his application form. If the applicant’s credit score is low, the lender may reject the application without even reviewing it further. If the applicant’s credit score is high, the lender may evaluate the feasibility and consider other aspects before deciding whether or not the applicant is creditworthy. They are looking for those that are serious about repaying the loan. The credit score is the lender’s first impression; the higher the credit score, the more likely the loan will be processed and approved.

What Are The Factors That Affect Your Credit Score?

Payment History – A spotless payment history demonstrates that you are a trustworthy creditor. The amount of credit you use in relation to your overall credit limit is known as your credit utilization ratio. Experts recommend that you keep your credit use at 30% to sustain a decent credit score. Because of their large credit exposure, borrowers have a higher chance of default.

Credit Utilization Ratio – To maintain a good credit score, experts suggest that you keep your credit utilization at 30%. A credit utilization rate of more than 50% is unfavorable to lenders. Lenders face a higher default risk because they have a high credit exposure. Credit utilization ratio is the amount of credit you use in relation to your total credit cap.

Credit Mix – Multiple credit accounts show lenders that you can manage multiple types of debt at the same time. It also helps individuals obtain a better grasp of their financial situation and debt repayment capacity. Credit mix, or the diversity of your credit accounts, is one of the most prevalent criteria used to compute credit ratings. Multiple credit accounts include a home loan, a personal loan, and a credit card.

Multiple hard inquiries on your credit – A high number of hard inquiries on your credit report will have a negative influence on your credit score. Multiple hard inquiries indicate that you are in dire need of credit, making you a high-risk borrower. When you take out more credit, you’re taking on more debt, and your credit scores will suffer as a result.

Length of your credit history – If you have a long credit history, creditors are convinced that you are good at debt management, which improves your credit score. Your credit score is determined by your oldest credit account.

Additional Read – 30 Things That Mess Up Your Credit Score

A credit score of 750 or more is considered excellent, and it can help you acquire the best interest rates and loan terms possible. Disciplined debt management would help you build an excellent credit score. If you believe you require expert assistance in repairing your credit score, Credit Mantri can help.

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