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What is CIBIL Score? Here’s everything you need to know

What is a CIBIL score?

CIBIL score is Credit Information Bureau India Limited (CIBIL) score.  A higher CIBIL score can considerably increase your chances of being approved and receiving better loan terms when you apply for a credit card, loan, or any other type of credit. This detailed article will provide practical advice on increasing your creditworthiness if you want to raise your CIBIL score. It ranges between 300-900. A good CIBIL score should range anywhere between 700-900. 

What are the benefits of a high CIBIL score?

  1. Simpler Process and terms: Quicker and faster loan application process, Easier loan documentation process, Longer or more flexible repayment tenure
  2. Better interest rates: Lower interest rates on the loan
  3. Higher credit limit: A higher quantum of loan

How to Check Your CIBIL Score Online Step-by-Step?

Here is how you can check your CIBIL score:

  1. Go to the official CIBIL website-
  2. Select ‘Get your CIBIL Score’
  3. Enter the required details with a valid ID.
  4. You will be asked to enter an OTP received on your registered mobile number.
  5. Go to the dashboard and check your credit score.
  6. You will be redirected to the website; log in to your account, and you can see your CIBIL score.

What are the factors that can affect your CIBIL Score?

A CIBIL score is made up of the following main factors. 

  1. Payment History 30%
  2. Credit Exposure 25%
  3. Credit Type and Duration 25%
  4. Other Factors 20%

Other factors: A credit inquiry is yet another element taken into account when determining your score. The lender will look at your credit record each time you apply for a loan or credit card. It’s referred to as a hard inquiry. Multiple credit requests made in a short period of time will lower your rating. Therefore, rather than submitting them all at once, it is recommended that you spread out your credit applications throughout the course of the year.

Tips to Improve your CIBIL Score

It is important to have a high CIBIL score as it helps banks decide whether to extend a certain amount of credit to you or not. Here are some things that help in improving your CIBIL score:

  1. Never delay credit EMIs/ card bill payments. 
  2. Always pay credit card bills in full. Don’t fall into the Minimum Payment trap, as you have to pay interest on the amount deferred to next month. Sometimes, you might even fail to pay it off.
  3. Avoid unnecessary expenditures using credit cards. Try to keep credit card use in check. 
  4. If you have business debt, have a good balance of secured and unsecured debt.
  5. Make sure to check your credit score regularly.
  6. Maintaining discipline when it comes to credit card usage is of utmost importance. Make sure you are not exhausting your entire credit limit.

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