The 3 digit numeric summary of the entire credit history of a person is known as the credit score or CIBIL score in India. The credit score is calculated based on the information recorded in a person’s Credit Information Report and ranges normally between 300 and 900.
Why it is important to know your CIBIL score?
A person’s CIBIL score plays a major role in the application and approval procedure of all types of loans. If your CIBIL score is not satisfactory, you will not be considered eligible for most loans. Once you fill out and submit your loan application form, the bank will first look at your credit score and credit report. If your credit history is not good and you have a low credit score then the bank can reject your application outright. The higher the CIBIL score, the better are your chances of getting a loan approval. However, CIBIL as an institution does not play any role in the approval of your loan as the authority to make this decision lies solely with the bank.
What can affect your CIBIL score?
- Making late payments on credit cards or delaying/defaulting EMIs on a regular basis can have a negative impact on your credit score as it indicates that you are not serious about clearing your existing debts
- Increased credit limit on your current credit card can also have a negative impact on your CIBIL score because it is considered as an enhancement of your repayment burden. However, if you spend more on your credit card it does not impact your score as long as you spend within the credit limit
- High percentage of unsecured loans like personal loans and credit cards can affect your credit score in a negative manner
- Multiple loans and credit cards and new accounts also negatively impact your CIBIL score and banks will tend to review your loan application more minutely
How you can find your CIBIL score?
It is possible to check your CIBIL score online. On the official website of CIBIL you can get an online score request form which you need to fill out and submit. The entire process is quite convenient and easy and takes only a few minutes and a nominal fee. The online form will require your personal details like name, date of birth, phone number, address, income, identity proof and address proof.
Once you fill out these details and click on submit, you will be taken to a page where there is an option to make payment. The fee for a credit report is Rs. 470 and you can make the payment either with your credit card, debit card or through net banking. After making the payment, you will be required to submit a few authentication details. Once the authentication is completed successfully, you will get your CIBIL score within 24 hours through email. As you can see it is a simple process and you can repeat it every few days and doing so is advisable because if you find that your score is low, you can take steps to improve it.
People who are not very internet savvy or do not have access to the internet, have the option of sending a printed application to CIBIL along with a CIBIL transaction ID and copies of your ID and address proofs. When they receive this application, CIBIL will verify it and send you a printed copy of your credit report to the address mentioned in your address proof. It is also recommended that you obtain your credit score and report personally rather than going through a financial institution because enquiries from banks and other lenders can also have a negative impact on your credit score.
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