Good credit score is essential as it indicates your financial health, thereby determining your creditworthiness. It also plays an integral part in your loan or credit card approval process. Credit bureaus assigns credit scores based on people’s past credit activities that ranges between 300 to 900. If your score is closer to 900, it reflects financial discipline and good credit standing. Also, if you are planning to apply for a loan such as a home loan or a car loan, then a good credit score can help you in getting the loan quickly. Hence, it’s crucial to check your credit score at regular intervals. In this article, you will read more about checking your credit score.
With the new age of technology and digitization, we can get everything with just a click. The information that we get online is credible and transparent. All the banks and NBFCs always check the credit score before sanctioning the loan. Well, we humans have endless dreams, like buying a new house or getting a new car. We often rely on taking a loan. But it is not easy to fulfill all our dreams. It all requires hard work and consistent effort. Out of the different factors, a cibil score criterion is robust. With the new age of technology and digitization, we can get everything with just a click. The information that we get online is credible and transparent.
All the banks and NBFCs always check the credit score before sanctioning the loan. Well, we humans have endless dreams, like buying a new house or getting a new car. We often rely on taking a loan. But it is not easy to fulfill all our dreams. It all requires hard work and consistent effort. Out of the different factors, a cibil score criterion is robust.
How to check your credit score?
Before granting you a loan, banks or other financial institutions check your CIBIL score. The CIBIL check generates a credit score that ranges between 300 and 900. A score below 300 is reduced, while a score of 900 is the best. Every month, banks and NBFCs furnish their reports to check CIBIL scores for multiple individuals and businesses. This method helps them to choose the appropriate customers and monitor the repayment patterns of existing customers. A cibil score of 700 and above is considered useful to get a loan without any hassle. So, how to check your credit score online?
Apart from banks and NBFCs, multiple online aggregators enable you to check your credit score online and also provide free credit reports and scores based on your past credit history.
Follow the below mentioned steps to check your score:
Step 1: Go to the CIBIL website
Step 2: Fill out the personal information such as name, contact number, email address, and click continue.
Step 3: Fill out the additional details, including your Pan number, and proceed to the next level.
Step 4: Answer the questions about your past loans and credit cards, which will help to calculate your CIBIL score and generate your credit report.
Step 5: You will get the offers of various paid subscriptions (if you need more than one report in a year). But if you don’t need more than one credit report in a year, you have the option to select No Thanks at the bottom of the page.
At this stage, your account is created, and a confirmed message is displayed on the following page.
Step 6: Login using your username and password that was created in Step 2
To proceed further, you need to authenticate yourself using an email sent on your registered account. Enter the one-time password provided in the email.You will be prompted to change your password and login again.
Step 7: Once you log in, all your personal details will be auto-populated by default. Check all the details. Then enter your contact number and click submit.
Step 8: Once you submit, you will get your CIBIL score.
However, it’s advisable to calculate your credit score every month to monitor the ups and downs in the report.
We have mentioned a few steps to maintain a good credit score:
Stay on top of payments: Stick to paying your credit monthly bills/installments on time and in full.
Check your credit report occasionally: You must keep checking your credit report at usual intervals. This will help optimize your credit management capability and keep you aware of any fraudulent activity on your credit card or loan account.
Keep your balances low: It’s advisable to use a credit card only for emergency expenses and pay off the balance as early as possible.
Avoid applying for new credit too often: Applying for a new loan or credit card frequently can hurt your credit score.
Have a good credit mix: You must have the right combination of credit accounts. A personal loan, car loan, or any other such debt installment could work. If you own only one type of credit account, your score may decrease.
Hence, the tips mentioned above will help you check your credit score quickly, and if you have a low rating, you can improve it.
How is CIBIL Report Generated?
The Credit Information Bureau of India Limited(CIBIL) is the most authoritative website which contains information about individuals’ credit-related transactions such as loans and credit cards. We must maintain the secrecy and privacy of data. The banks and lending institutions pass on the information further. Thereby, after scrutinizing all the documents, a credit information report and credit score are derived.
Calculation of the Credit Score
The entire credit report of the concerned person is recorded in the report. It includes the complete data consisting of the loan, credit card payments. Moreover, the report also consists of new loan applications, interest rates. The status called the written off or settled or closed speaks a lot.
An entire statistical derivation is made, thereby we drive at the credit score. A good or a high credit score always wins over a low credit score.
Let us look at the below illustration to make things more clearer :
|Loan profile||Percentage of secured and unsecured loans||Maintain an accurate credit score|
|Credit usage||– Adhering to credit limit- Number of loans availed||Timely payments of credit bills|
|Payment history||– Failure to repay loans- On-time payments of loan EMIs||Avoid spending beyond the credit limits|
|Others:||-Number of loan applications-Number of loans to manage||Avoid applying for loans with multiple lenders at the same time|