Credit information bureau ltd., also called CIBIL, is a premier credit agency that provides credit reports and credit scores as per your credibility. CIBIL sources your financial data like credit card and loan information from leading institutions and other financial institutions across the country. This data then is presented in the form of a credit report, also called CIR (credit information report).
CIBIL was incorporated in around 2000 and continues to expand its presence across India. It is backed by TransUnion International and Bradstreet, which are crucial global agencies and credit bureaus. On the contrary, you can fetch your credit score through an online lending platform too at no cost. There are many reasons for you to consider online lending platforms. These include:
∙ Convenient and simple to use
∙ Shows accurate credit score
∙ Applications offer advice on how you can ameliorate your credit score
∙ Does not require you to provide ample information
∙ Application is completely safe for the use
∙ You can fetch your credit report for free
Continue to read on to learn how you can review your credit score at zero cost and get some instant credit improvement tips –
How can you check your credit score at no cost?
Checking your credit score at zero cost on online lending apps or important apps like Paytm mobile application takes just a few seconds. The step to review your credit score for free on your Paytm app include:
∙ Log on to your Paytm mobile application
∙ Go to the loans & credit card section
∙ Click on the option free credit score & you are done
∙ Upon application, request a credit score summary
What is meant by CIBIL score?
Credit information bureau ltd, popularly called CIBIL, is an RBI authorized credit agency. This offers a CIBIL score and reports to the individual. A CIBIL score is prepared by the CIBIL bureau after factoring in your detailed credit info. Also, the agency offers credit report services to NBFCs and banks. A CIBIL score is a 3-digit number that ranges anywhere between 300 and 900, wherein 300 is the lowest that shows your credibility. A higher CIBIL score shows your good credit history and judicious repayment behaviour. CIBIL score is computed based on at least six months of your historical data. Data is fed into an algorithm with 258 distinct variables, each with distinct weightage.
Why is an excellent credit score crucial for loans?
CIBIL score range is lies between 750 and 900. It will be considered by NBFCs and banks when factoring in the loan application for most loans, whether it is a vehicle loan or a home loan. A strong CIBIL score is, also known as a credit score, has various benefits during the loan application procedure:
∙ Faster and quicker loan application procedure
∙ Simpler loan documentation procedure
∙ Lower rate of interest on a loan
∙ Higher loan quantum
∙ Higher or more flexible tenure
∙ The choice between multiple loan lenders so that you can choose the loan that is best for you. Additionally, such a credit score results in easier and quicker documentation procedures.
|Track record of last payments||Record of all last repayments
Constant making payments on time results in higher credit score
Delayed payments result in lower credit score
Current delayed payment leads to the negative impact
|Past settlements, write-offs and defaults||Latest write-offs affect negatively than the older ones
Multiple write-offs result in lower credit score
Write-offs documented by the lenders on the past debt lower credit score
Defaults and delays on secured credit option repayments affect more negatively than the unsecured credit options
|Loans as a proportion of the income||A low loan balance is indicative of healthy credit usage and thus has a higher credit score.
A high loan balance lowers your credit score
|Secured vs unsecured loans & credit cards||A high credit card balance reduces your credit score
Reliance on the unsecured loans over the secured credit options is viewed negatively
Lesser number of these accounts coupled with continuous payment history enhances your credit score
|Loan equities||Several loan inquiries to avail of the loan are indicative of credit hungry behaviour that negatively impacts your credit score.|
How can your review your credit score online – step by step:
Here’s how you can review your credit score:
∙ Step no. 1: Go through the official credit score website – https://www.cibil.com/
∙ Step no. 2: Choose the option “Get your credit score”
∙ Step no. 3: Click on the option “click here” to avail your free annual CIBIL score
∙ Step no. 4: Type your name, email ID and your password. Attach the identity proof (PAN card, passport, voter ID and Aadhaar card). Then place in your PIN code, DOB (date of birth) and your mobile number.
∙ Step no. 5: Click on the accept and continue option
∙ Step no. 6: You will get the OTP on your phone number. Type your OTP and choose the ‘continue’ option.
∙ Step no. 7: Choose the option ‘go to dashboard’ and review your score
∙ Step no. 8: You will get redirected to the site, myscore.cibil.com
∙ Step no. 9: Click on the option ‘member login’, and once you log into it, you will see your credit score.
Is it true that the lenders give priority to the applicants with strong credit scores?
∙ Banks, lenders, and financial institutions generally prefer to lend credit to the seekers with strong credit scores over those having bad or poor credit scores. A major reason for this is that a strong credit score shows your responsible repayment behaviour.
What are the parameters that impact your credit score negatively?
There are various crucial factors that have a negative impact on your credit score, are as follows:
∙ Past repayment history is bad
∙ Payments are constantly delayed
∙ CUR (credit utilization ratio) is utilized extensively
∙ Several inquiries take place in a short time period
∙ Errors or comments in your credit report
∙ Leaving the unpaid balances
May it be any lender, Bajaj Finserv or SBI, a credit score checkup is extremely crucial. For Bajaj Finserv, CIBIL score evaluation is important. So is the CIBIL score check for SBI important.