- HOW IT WORKS?
- Credit Score & Report
- Credit Bureaus
What is CIBIL Score / credit score?
An entire summary of an individual’s credit history is usually referred to as Credit Score or CIBIL score. CIBIL Score is a three-digit numeric summary of one’s entire credit history. This score is resultant numeric summary derived from the information provided in the Credit Information Report (CIR). This score normally ranges between 300 and 900. The higher the score towards 900, better the borrower’s chances of loan getting approved and vice versa.
One of the most important eligibility criteria for an individual to get a loan from bank is to have a good credit score. The credit score is a score based on the credit history of the individuals and is usually checked by the Banks though CIBIL (Credit Information Bureau India Limited). It is an indicator of the credit history of an individual and it is something which reflects the record of late payments, defaults on their loans and credit cards held in the past or current loans or cards. In many cases, the number of loans and credit cards applications submitted by an individual.
Dedication and diligence shown towards repayment of loans or cards work positively in contributing for CIBIL score. Any sort of negligence in repaying the payments for loans and credit cards will result in a bad credit history resulting in a bad score. A good CIBIL score determines the credit-worthiness of the borrower and loan/credit card approvals faster.
CIBIL Score Range:
CIBIL Score is a three-digit numeric summary of one’s entire credit history. This score is resultant numeric summary derived from the information provided in the Credit Information Report (CIR). This score normally ranges between 300 and 900. The credit worthiness and loan eligibility of a borrower is judged by the banks with the help of the CIBIL score. The higher the score towards 900, better the borrower’s chances of loan getting approved and vice versa. Not just an approval but also a competitive interest rate is also possible.
To be specific, if the CIBIL score of an individual is greater than 700, there are bright chances of loan approvals. But of course the acceptable Credit score differs from bank to bank as it is based on their Bank Credit policies, the maximum CIBIL score to get a loan would be close to 900.
To be much more precise, we have a break-up of some scores and their meaning listed below:
- “0” score means there was no credit history in any sort of loans or credit cards in the past.
- “350 – 550” score is a bad score; it means that there have been some default on payments in the past. There are very few chances of getting a loan or credit cards and show multiple bankruptcies, past due accounts and loan defaults.
- “550 – 650” score is an “Ok” score; it means that the payments were fairly regular and lending of any sort can be considered. Some with such score are seen as a high risk and any individual with this credit score can still obtain loans and credit cards, but often times with the highest interest rates.
- “650 – 750” score is a good score and will definitely have a positive impact when it comes to loan or credit card approvals. CIBIL score will also good for such scores. This score is considered as excellent credit score and an individual with this score will be able to obtain some of the best lending rates.
- “750 – 900” score is supposed to be the best range to be in, it means the payments were on time and money management with credit cards and loans was well balanced. Banks or Financial institutions will be happy to lend any sort of loans or cards for you without any hassles.
Why should you get your credit information report?
A good CIBIL score is a crucial component of one’s financial life in India. The score usually represents the creditworthiness of an individual, i.e., both the individual’s willingness and ability to repay an outstanding debt. A “good” score is a key to making your dreams come true and the parameters of scoring differ from lender to lender. It’s always wise to keep a tab on your credit score, because it does make a difference if you want to apply for a loan or a credit card. And any incorrect information may result in a low score.
A credit report, apart from being a certificate of creditworthiness is also something which keeps you posted about any mistakes or flaws made in your report by the creditors or other people requesting your report. Since a credit report is usually keyed in by people there is a scope for error many times and certain times some information is missed or omitted, some information could be conflicting and not 100 percent accurate. Sometimes there is a fair chance of the credit bureaus making the same mistake. Mistakes related to records, reports, either in a number, a letter in a name etc. Lastly to make sure the creditors made no errors when reporting to the bureaus.
Things that positively affect your credit score:
Being punctual and doing things right will always yield good results, so here are some things which will affect your credit score positively:
- Punctual payments.
- Regular payments towards credit cards
- Not defaulting any loan or credit card payments
- Maintaining or staying within the credit limits
- Maintaining healthy financial record and not applying for unnecessary loans
- Keeping in good terms with the banks and financial institutions by making payments
- Keeping a track of credit standings personally and making corrections whenever necessary
Things that negatively affect your credit score:
Credit score will be affected negatively when one does things which are not in favor of the terms of the lending institutions. Some of them are listed below:
- Late payments
- Not paying at all
- Defaulting a loan
- Maxed out credit card limit
- Numerous applications for loans in the past
- Making foreclosures or paying off loans much before scheduled time
- Filing bankruptcy
- Usage of credit limit in moderation i.e., if you end up using 80 percent or higher credit limits on accounts results in negative impact.
Once beyond credit limit or in overdraft, if many requests are made for new credits, then there would be a negative effect on the credit score.
There is another possibility where there can be a negative impact on your credit score i.e., if there is an enquiry made by lenders about your score, known as hard inquiry, the score will definitely have a negative impact.
Benefits of maintaining high credit scores:
Benefits of maintaining a good credit score are pretty much straight forward. By maintaining high credit scores one can have many benefits like getting hassle free loan approvals and getting low interest rates on loans and cards. Some of the most obvious benefits are listed below:
- Low interest rates on loans and credit cards – Any sort of borrowing comes with an interest rate and that interest rate is directly tied to your credit score. That simply means, the higher your score is the better the interest rates and lower finance charges on credit cards balances and loans would be.
- Brighter chances of approvals – The higher the score the brighter the chance of approval of loans and credit cards with ease.
- Negotiation power – The negotiation of interest rates becomes much easier and leverage to customers with high credit score is given when compared to others.
- Higher credit limits – Customers with high credit scores will always get higher credit limits and that’s an added advantage.
How to get CIBIL credit scores online:
CIBIL score comes with a cost. CIBIL is one of the oldest credit bureaus in India, alongside Equifax, Experian and CRIF High Mark authorized by RBI. They operate differently, but their algorithms are almost the same. None of the credit bureaus give a score for free. As on date, a credit score through these bureaus comes with a nominal fee and the same applies for a copy of a report as well. You can always choose to get your credit score online from the websites of any of the bureaus.
However, the process involves some formalities like submitting some valid documents in order to carry out some background check on an individual. One must fill an online application and submit few documents related to their bank accounts and any loans, if any. The process takes approximately up to 72 hours or more, depending on the requirements.
There is an option to apply for a credit score on the CIBIL website which is called the “CIBIL online credit score request form”. For a single score and report there is a charge of Rs.550/-, Bi-Annual subscription with 2 score reports has a charge of Rs.800/- and there is a quarterly subscription with 4 score reports with a cost of Rs.1200/- .Once you choose the relevant option, you will need to make an online payment and give some more details about your loan or credit card before completing the request. In summary, CIBIL charges a fee to deliver its credit score report.
How to Get a Free Credit Score and Report?
CIBIL score or CIBIL report cannot be acquired for free. There is a nominal charge of about Rs. 500/- in order to get a Credit Information Report and Transunion Credit score. As on date, a credit score through these bureaus comes with a nominal fee and the same applies for a copy of a report as well.
However, the process involves some formalities like submitting some valid documents in order to carry out some background check on an individual. One must fill an online application and submit few documents related to their bank accounts and any loans, if any. There is an option to apply for a credit score on the CIBIL website which is called the “CIBIL online credit score request form”. For a single score and report there is a charge of Rs.550/-, Bi-Annual subscription with 2 score reports has a charge of Rs.800/- and there is a quarterly subscription with 4 score reports with a cost of Rs.1200/- .Once you choose the relevant option, you will need to make an online payment and give some more details about your loan or credit card before completing the request. In summary, CIBIL charges a fee to deliver its credit score report.
However, Creditseva aims to be your best friend when it comes to tracking your credit score or credit report. We strive to make life simple for people seeking help in tracking the same. Keeping in mind the fact that the whole world is running for credits, we have created a tool to help people get access to their financial status.
To start off with, one should sign-up with us to get a detailed screening of the CIBIL report and credit scoring. Our smart tool will then ask you to upload your credit report obtained from CIBIL. The report will then be analyzed and a graphical representation of the report is made for better understanding. This graphical representation will help you to understand the account payment patterns and any existing errors in the report. We will then help you rectify all sorts of concerns related to your credit report and help you to meet your financial needs like educations loans, home loans, credit cards etc. With perfect guidance from us and that too free of charge.The first step towards your financial well-being is signing up with Creditseva®. tool and uploading your credit report that you have obtained from CIBIL. Once the report is uploaded this smart tool analyses the same and with the help of detailed analytics and graphical representation, understanding the report becomes very easy.
Now you can settle old accounts, rectify errors, protect your identity from fraud, and also set reminders for various financial transactions. Once you have attained the desired score and making all your payments on time, you can avail new loans and credit cards from various banks.
Now it’s easy to become credit healthy!
Difference between CIBIL Report and CIBIL Score:
Common Bank terminology uses terms such as CIBIL score and CIBIL report, these terms are usually used when someone is applying for credits from financial institutions or banks. We can say that these two terms are inter-related and have a remarkable effect on a person’s credit standing. The CIBIL score as well as CIBIL report are checked thoroughly before lending credit to customers.
As we have mentioned earlier, it’s always wise to keep a tab on your credit score. Because any incorrect information may result in a low CIBIL score and poor CIBIL report. Many people are internet savvy and are keeping a track of their credit standings online. This way of keeping a track of credit standing helps in maintaining a good credit record and or improving a bad credit score.
- CIBIL Score: A number that indicates the creditworthiness of an individual is referred to as a CIBIL score. This score is derived for a customer by the lenders who are registered with CBIL, in other words the credit bureau. Credit bureaus usually have many policies and multiple parameters to run through in order to arrive at a final credit score of a customer. This usually relates to the number of credit cards or loans owned by a customer, repayment history of bills, credit limit utilization etc. A CIBIL score lies in between a range of 300-900. A score above 750 is considered a good CIBIL score and a score below that may have negative impact on the score and may not be considered for any type of lending.Whereas a CIBIL report is a comprehensive document containing overall credit information of an individual while a CIBIL score is a numeric expression derived from a result processed by lenders. This means that CIBIL score is just a number that indicates a creditworthiness of customers whereas CIBIL report is a detailed document with information related to the credit history of an individual.
- CIBIL Report: In detail a CIBIL Report contains other information related to the customer like their personal details. It is considered an important document containing important credit related details.
CIBIL report commonly has the following details:
A CIBIL report is generated by CIBIL through customer credit data received from various banks and lending entities. This data is then formatted and processed to make a detailed credit report for each customer. Following is the information commonly contained in a CIBIL report.
- Personal information like name, age, gender, address etc.
- Employment and income details
- Types of loans, previous loans, current loans and their repayment options
- Credit card details (Previous and current if any) and payment history of credit cards
- Any enquiries made in the past by the customer himself from various loan providers
- Lastly the most important, credit score
Customers should request their credit reports almost every year in order to check their records. It doesn’t just stop by checking the records but also helps in correcting any incorrect information given by lenders or banks. Hence, a credit score is a numeric indicator to your creditworthiness whereas credit report is an in depth report of your credit history over a period of time.
CIBIL Score / credit score FAQ’s
- What is CIBIL?
In India, TransUnion CIBIL Limited (or CIBIL – Credit Information Bureau India Limited CIBIL) is one of the foremost credit bureaus licensed to operate by the Reserve Bank of India. CIBIL gathers and preserves records of an individual’s payments pertaining to credit cards and loans. Every month, member banks and credit institutions submit these records to CIBIL. Credit Information Reports (CIR) and
- What is a Credit Score?
A CIBIL Score is an indicator of an individual’s credit worthiness in the form of a number ranging from 300-900. It has a direct impact on an individual’s ability to borrow credit from lenders.
- What is the best credit score to have?
The best credit score one can have is a high score of 750 or above, this reassures banks that a borrower had a good repayment history and is a worthy customer.
- What is a bad credit score?
A credit score is a 3 digit number in the range of 300-900 that is issued by a credit rating agency. A score is considered bad when it is less than 650.
- What is the average credit score?
In India there is no such score which is considered an average score. The credit score is directly proportional to the credit behavior of the customer.
- What is the best credit score to have?
The higher the score the better the score, so a score of 750 or above is considered best score. Banks are reassured that there is a good repayment history and low-risk customer.
- Why is my Credit Score important for getting my loan sanctioned?
Needless to say, a credit score plays a major role in loan application process. After the application is filled and formalities are done, the lender usually needs to check the creditworthiness of the borrower. A good credit score plays an important role in loan application approval, the better the score the chances of approval are more and vice versa.
- How can I improve my Credit Score?
Improving a credit score is straightforward and as
- Keep within the credit limit
- Maintain lower balances
- Stop applying for new credits unnecessarily
- Make payments on or before time
- TransUnion CIBIL
- CIBIL Credit Score
- CIBIL Credit Report
- Free CIBIL Score & Report
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