CIBIL score is an important factor that lenders consider when assessing a loan application. As this score is important if you want to secure a loan, you must understand how it is calculated. A proprietary algorithm determines the CIBIL score, but most but the prime elements of the score composition are decided by the payment behaviour of the individual. This blog aims to acquaint you with exactly what a CIBIL score is, CIBIL score check and how to perform a CIBIL score check.
What is the CIBIL score?
The CIBIL score of your account is a 3-digit number representing the summary of your credit history. It is based on the details in the ‘Enquiries’ and ‘Accounts’ section of your CIBIL report that includes your credit cards or loan accounts, their payment history, and the past due of the outstanding amounts.
The CIBIL score reflects how worthy you are to get a credit based on your borrowing and repayment history, depending on the review of the lenders. It ranges from 300 to 900. Your chances of getting a loan approved depend on your CIBIL score login. The higher the score, the more the chances. Most loans are sanctioned to customers with a CIBIL score of 750 or higher.
How to calculate the CIBIL score?
Four factors impact your CIBIL score— payment history, multiple enquiries, credit mix, and high credit utilisation.
- Payment history: Your CIBIL score is negatively affected if you make late payments or default on your EMIs
- Credit mix: If your credit is a balanced mix of unsecured and secured loans, your CIBIL score will be impacted positively.
- Multiple enquiries: Your CIBIL score will be adversely affected if there are too many loan enquiries. This is because it indicates that your loan burden may increase in the future.
- High credit utilisation: Having a high credit score means your debt burden rises over time. It may impact your CIBIL score negatively.
How can you work towards a high CIBIL score?
As your CIBIL score depends upon your past payments and credit history, there are certain steps you can take to build a healthier and stronger credit footprint. Following the quick tips below will help improve your CIBIL score login and impact your future access to credit.
- Ensure that you always pay your dues on time, as lenders often view late payments negatively.
- Too many unsecured loans are considered a negative point. So, make sure to maintain a healthy credit mix of unsecured and secured loans.
- Please do not apply for new credits in excess, as it will indicate that you are continuously seeking credits and won’t lay a good impression on the lenders.
- Perform monthly monitoring of your guaranteed, co-signed, and joint accounts. Remember that you will be held equally liable for missed payments from these accounts. The negligence from your guaranteed, co-signed, or joint holder’s account will negatively affect your creditworthiness in times of need.
- Ensure that you review your credit history at frequent intervals. Also, you must do a CIBIL score check and observe the generated report at regular intervals to stay updated with any unpleasant events, such as a rejected loan application. You will also be alerted to any possible inaccuracies if you check your CIBIL report regularly. In case of any discrepancies, you can log in to the CIBIL website and start a dispute, following which the lender will correct the discrepancy.
Getting a loan is a very important financial aid in times of need or in case of an emergency. In some cases, it might be the only option to get out of unpleasant situations. Therefore, it is important to keep an eye on your CIBIL Score Login by performing a CIBIL score check and take steps to increase it. Hope this blog helps you with achieving the same. Start taking steps to improve your CIBIL score today.