Checking your CIBIL score from time to time is important and also very easy. Check free credit score to assess your financial health and credit worthiness. This will help you take corrective action before you seek any kind of loan. So go ahead understand the steps and check your CIBIL score free online.
In today's financial landscape, the term 'CIBIL Score' resonates with paramount significance. A yardstick of creditworthiness, your CIBIL score is akin to a financial report card, shaping lenders' perceptions of you. However, much like any report card, it's imperative to understand, analyze, and continuously improve it. Let's embark on a journey to deeply understand the nuances of the CIBIL score and how one can check it without incurring any cost.
CIBIL (Credit Information Bureau (India) Limited) Score is a three-digit number ranging from 300 to 900, which represents an individual's creditworthiness. The higher the score, the better the individual's credit profile. It's an important metric that lenders use in India to evaluate the risk of lending to an individual based on their past credit behavior.
The CIBIL Score, provided by TransUnion CIBIL, acts as a financial grade for every individual. Think of it as a number, anywhere between 300 and 900, that tells lenders about your money habits. It primarily focuses on how you've managed borrowed money in the past. If you're closer to 900, it indicates you've been responsible, paying back loans or clearing credit card bills on time. But a score nearer to 300 suggests you might have had some hiccups with managing debt.
Now, why does this number matter? Well, whenever you apply for a loan or a credit card, banks and other lenders glance at this score. A high CIBIL Score assures them that you're likely to pay back without issues. On the other hand, a lower score might make them cautious, thinking there's a risk you might not pay back promptly. In essence, this score is a mirror to your financial discipline. It provides a snapshot, helping institutions quickly gauge if lending money to you is a safe bet.
In order to check free credit score, you need to follow a few simple steps.
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The CIBIL score plays a pivotal role in the Indian financial landscape. Its importance stems from several factors:
Also Check: IIFL CIBIL Score
Let's have a look at all the different factors that help create or build your CIBIL score along with their relevance.
Repayment Records (35%):
Amounts Owed (30%):
Length of Credit History (15%):
Credit Mix (10%):
New Credit (10%):
Your CIBIL score ranges from 300 to 900 depending on your credit history. It includes your repayment history, your personal details, your employers’ details, your repayment methods, duration, and other details. These are examined by your potential lender when you apply for loans or credit cards. On the basis of the credit score, your lender decides whether or not you are an eligible borrower.
Check your free credit score and make sure you have a sufficient credit score to get your loan applications approved. If you are wondering how you can improve your credit score, a few points should be taken into consideration.
Make sure you implement these ways if you are wondering how to maintain a good CIBIL score. Do not take your CIBIL scores lightly. It will affect your loan-taking procedures stressful in the long run. Check your CIBIL score free online frequently. Keep track of your credit history and follow all the necessary steps to ensure your CIBIL score is decent enough before applying for a loan.
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Your CIBIL score is calculated based on a few factors. Your potential lender examines these while you apply for loans and credit cards. The major factors that your CIBIL score depends on include:
Check your CIBIL score for free and analyse whether you have enough CIBIL scores to apply for credit cards and loans.
Also Read - Complete Guide About Cibil score calculation
The range of your CIBIL score ranges from 300 to 900. 900 is the highest credit score one can have. On the other side, 300 is the lowest credit score to have. 750- 900 is considered a decent credit score that you can have to be approved for loans by lenders. Take a look at the chart to understand your creditworthiness based on your current CIBIL Score.
|Credit Score||Creditworthiness||Approval Chances|
|Less than 600||Urgent actions required||low|
|700-749||Very good||Very high|
Make sure you check free credit score to understand how much improvement you need to have a decent CIBIL score of 750-900 before you apply for loans.
Also Read - Tips to Increase CIBIL Score from 600 to 750
Improving your CIBIL score might seem challenging, but with the right strategies, it can be achieved over time. Here are some effective ways to bolster your score:
Consistent On-Time Payments:
Monitor Your Credit Utilization:
Retain Aged Accounts:
Limit Loan Applications:
Review for Inaccuracies:
Diversify Your Credit Portfolio:
Clear Outstanding Debts:
By diligently following these guidelines and maintaining a proactive approach towards your financial commitments, you can steadily enhance your CIBIL score, making you a favorable candidate for future credit opportunities.
Also Read - What is CIBIL
Also Read - Equifax Credit Score
A good CIBIL report typically means the individual has a CIBIL Score closer to 900, indicating they have been responsible with their credit. It's usually considered that a score above 750 is good. The report will also be free of negative marks like late payments, defaults, or loan settlements.
Essentially, a CIBIL Score is a type of credit score, but the term "credit score" is more generic and can be used globally. There are other credit bureaus in India, like Experian, Equifax, and CRIF High Mark, which also provide credit scores. The term "CIBIL Score" specifically refers to the credit score provided by the CIBIL bureau in India.
There are certain factors which might look like they can impact your CIBIL score but in reality they do not have any impact on your creditworthiness whatsoever.
Your Savings or Current Account Balances:
CIBIL Score is a reflection of your credit history and not your savings or wealth. Hence, how much money you have in your bank accounts doesn't directly influence your credit score. The score is more about how you manage debt rather than how much money you possess.
Your Income or Salary:
While your income might be considered by lenders to determine if you can afford a loan or credit, it doesn't directly factor into the CIBIL Score calculation. However, lenders may ask for income proofs separately to gauge your repayment capacity.
Investments or Fixed Deposits:
Again, your investments, whether they be in stocks, bonds, mutual funds, real estate, or fixed deposits, don't directly affect your CIBIL Score. These assets could influence a lender's decision to give you a loan or credit because they reflect your financial stability, but they don't change your CIBIL score.
There are two types of credit inquiries – soft and hard. Soft inquiries occur when you check your own credit score or when a company does a background check without your explicit consent (like for promotional credit offers). Soft inquiries don't affect your CIBIL Score. In contrast, hard inquiries, like when applying for a loan, can have a temporary impact.
Age, Gender, Religion, or Nationality:
Discriminating based on these factors is not just unethical but also illegal. Credit scores are purely based on financial behavior and credit history. Personal attributes like age, gender, religion, and nationality have no bearing on your score.
Education or Occupation:
Whether you're a PhD holder or a high school graduate, or whether you're a CEO or an entry-level employee, your CIBIL Score remains unaffected. Your score is a reflection of your financial behavior and not your educational qualifications or job profile.
To sum it up, the CIBIL Score is designed to evaluate your credit risk based on your past credit behavior. It doesn't take into account your wealth, assets, personal characteristics, or other factors unrelated to credit. It's all about how you handle credit and debt.
Understanding the reasons behind a low CIBIL score is crucial for anyone looking to maintain or improve their creditworthiness. Let's delve deeper into the reasons for a low CIBIL Score:
Missing Loan or Credit Card Payments: Timely payment of loans and credit card bills is a significant factor in your CIBIL Score calculation. Even a single missed or late payment can negatively affect your score. Consistent late payments can lead to a considerably reduced score.
High Credit Utilization Ratio: This is the ratio of your current credit card balances to your credit limits. A high utilization rate (usually above 30%) indicates reliance on credit and can signal to lenders that you might be at a higher risk of default. It's advisable to keep your utilization low to maintain a good CIBIL score.
Applying for Credit Too Frequently: Every time you apply for a credit card or a loan, the lender performs a "hard inquiry" on your credit report. Multiple hard inquiries in a short period can decrease your score, as it may appear to lenders that you're desperately seeking credit or are unable to live within your means.
Holding Too Many Credit Cards or Loans: While having multiple credit lines can be beneficial for your credit score, mismanaging them or taking on more debt than you can handle can negatively affect your score. It's not just the number of credit lines, but how you manage them that matters.
Defaulting on a Loan or Settling with a Bank: If you fail to repay a loan or end up settling with a bank for an amount less than you owe, it will significantly reduce your CIBIL score. A loan default or a credit card settlement remains on your credit report for several years and can make it difficult for you to secure credit in the future.
Having No Credit History or a Very Short Credit History: If you've never taken a loan or owned a credit card, you might not have a credit history at all. This lack of credit history can lead to a low or non-existent CIBIL score. Lenders prefer borrowers with a proven track record of managing credit responsibly.
Errors or Inaccuracies in Your Credit Report: Sometimes, errors or inaccuracies, like a payment wrongly reported as missed or a loan that you've never taken being listed under your name, can bring down your CIBIL score. It's essential to regularly review your credit report and rectify any errors you spot.
Guaranteeing Someone Else's Loan: If you've acted as a guarantor for someone else's loan and they default, the lender might approach you for repayment. If you fail to fulfill this obligation, it could adversely affect your CIBIL score.
When you personally check your own CIBIL score, it is termed as a "soft inquiry" and does not impact your score. However, when a lender checks your CIBIL score for the purpose of lending, it's considered a "hard inquiry" and can have a temporary negative impact on your score if done frequently. It's always a good idea to periodically check your score for accuracy and to understand where you stand, but ensure that you're not applying for credit too frequently. Remember that maintaining a good CIBIL or credit score is crucial for securing loans or credit cards at favorable terms. Regularly checking your report, ensuring accuracy, and managing your credit responsibly are key steps to achieving and maintaining a good score.
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Visit the official website of the CIBIL company and press the option that says ‘get your full CIBIL score’ to get a free CIBIL score instantly.
The most authentic way to check your CIBIL score is by visiting their official website www.CIBIL.com.
They provide a 100%authentic credit report to all the customers.
For a standard subscription, you will have to pay around Rs.800. The package includes two credit reports over six months. If you want to subscribe for a package of four months, it will cost around 120/-
The best way is to reach out to your lender and request them to come to an agreement and offer them to pay the entire amount that you have to due.
This way, it will be easier for you to convince them to withdraw the lawsuit filed in the court against you.
Make sure you make your payments regularly for all the bills, monthly EMI, dips, and other bills. Do not apply for multiple credit cards and keep your credit limit utilisation within 30% to get a CIBIL score of 800 fast.
800 is an excellent score to apply for loans. When you have a credit score of 800 and above, your loan applications will most likely be approved by all potential lenders.
Also Read : CIBIL Dispute
First, check free credit score and analyse how much you have to increase in order to reach 900 soon.
Manage your expenses well. Pay all your bills timely and make sure you do not make late payments at all.