Know More About The Credit Score And How-To Check Your Score?
Borrowing and lending: these two words are very familiar to us. But sometimes, the person to whom you lend money forgets to repay your hard-earned money. This fiasco may make you think twice before giving any money to the person again. Similarly, financial institutions also lend money to those only who are creditworthy. At this time, the Credit score helps to verify an individual’s creditworthiness.
What is the CIBIL score?
CIBIL full form is Credit Information Bureau (India) Ltd. The CIBIL score is one of the essential factors that every financial institution and lender considers when receiving a loan request. Almost every financial institution is affiliated with TransUnion CIBIL to verify millions of individuals and enterprises’ creditworthiness. A high credit score denotes your good prestige and your integrity. Whenever you apply for a loan, your recent score of the last six months is checked.
Who calculates the CIBIL score
TransUnion CIBIL is the first kind of credit bureau established in the year 2000 in India. The firms calculate the CIBIL score of every individual based on the information submitted in the repository.
The steps to check credit score:
You can follow the below steps to check your CIBIL score whenever a person asks you how to check credit score:
- To check your score, first, you have to visit the official website of The TransUnion CIBIL.
- On the homepage of a free CIBIL score, in the ‘Personal tab’, click on the ‘Get Yours Now’ button under it. When you click on it, you will get a detailed report of your CIBIL score after paying a certain amount of applicable charges.
- When you have opted for a free CIBIL score report, you will get to a page where you must fill up your personal information to sign up. In the second step, you will sign up to verify all the leads with a government-issued document.
- But if you already have an account, you can sign up there only to check the score.
- After signing up, your credit score will be sent to you through an email address to your id provided in the form.
Factors that affect your credit CIBIL score
- Repayment History – The financial institution considers your past payment history to keep a record for the future. Whenever you avail of a loan, the lender will check your credit history to check your creditworthiness. When all your payments are made on time, it is a positive sign for your loan approval.
- Numerous existing loans – If you have many loans in your name, it is a significant concern. It is a better idea to complete the first loan before availing, the next. Moreover, you should focus on closing smaller loans first.
- Debt to Income ratio (DTI) – Lenders generally suggest taking less debt, about 40% of their income. DTI is used to compute the amount of loan to be given based on the consumer’s income and their ability to repay the debt.
- The drastic increase in debt – An individual should have a credit limit. If you have a huge credit credit, lenders consider it as a red flag. You have to maintain a credit limit; otherwise, your loan will not get approval.
The method to check your CIBIL score:
- You need to know that you are eligible to acquire your credit report once every year. But if you have already got your credit report, then next time, you are supposed to pay a fee to check your CIBIL score.
- You will be directed to an online form where you need to fill up your details correctly.
- Thereafter, you need to enter the captcha given in the box appropriately. You will be asked to ‘tick mark’ a checkbox to accept the terms and conditions. You can then proceed to the payment process.
- After the payment, your report will be sent to you through email.
Importance of CIBIL report:
CIBIL score is mandatory to get your loan to be approved faster. With a positive credit report, you can bargain for a better interest rate on loans. With a higher credit score, you can easily apply for life insurance, medical insurance and others. Your payment discipline is also a factor that can be considered for your loan approval. A higher score can help you to pick credit cards of your choice. Thus, it is essential to maintain a good credit score.