Business & Economy

What is CIBIL Score and how can you check it?

By A Correspondent

Mumbai, February 24, 2020

Have you ever reflected on taking a loan to purchase a new house, or to buy that dream car of yours? Maybe have a destination wedding? Or maybe even start that business of yours? If you wish to borrow or take a loan from the bank or a financial institution, make sure you have a decent credit score.

But, what is a credit score?

Credit score, also known as CIBIL Score is a three-digit numeric summary of your credit history ranging from 300-900. The score is derived using the credit history found in the CIBIL Report (also called CIR i.e. Credit Information Report). A CIR is an individual’s credit payment history across loan types and credit institutions over a period of time. The closer your score is to 900, the stronger is your credit profile.

Did you know that 79% of loans are approved for individuals with a CIBIL Score greater than 750? Higher your score, better are the terms offered by lenders.

A Credit Score is looked upon by lenders to determine your creditworthiness. Today, the CIBIL Score provides lenders with the flexibility to differentiate between those who have honoured their obligations responsibly and those who haven’t or defaulted. Individuals who have managed their obligations suitably, build a ‘reputational collateral’ with lenders. In turn, this reputational collateral could permit individuals to negotiate better terms with a lender.

According to a survey by the oldest credit bureau of the country -- TransUnion CIBIL, 74% of Indian consumers check credit scores at least twice a year. Experts suggest that checking your CIBIL score and report before applying for a loan or credit line is an important step. However, that should not be the only approach to credit management. To be truly financially healthy, monitoring the information in your credit report is something that should be done on a regular basis.

HOW TO CHECK CIBIL SCORE?

You could check your CIBIL score by following these easy steps:

1. You can initiate the process by filling in a form on CIBIL’s official website.

2. Enter your details such as name, address, and contact number.

3. If you want a CIBIL Transunion score and your CIR (credit information report), you need to pay a nominal fee. However, these days, CIBIL as well as other credit bureaus also offer one report free of cost. You might need to pay a fee if you want to keep checking your detailed credit report again and again.

4. Once you’ve submitted the form and made the payment, your CIBIL score and report will be mailed to you

You can also apply for your CIBIL score offline by mailing all your documents and a demand draft for the fee to CIBIL’s office in Mumbai.

Use a Personal Loan to improve your CIBIL score

Personal Loan is considered as the go-to option when we require instant funds. As this type of a loan is an unsecured loan, there is no underlying collateral or security required. Personal Loans in return can also help you to boost your credit score. Yes, you need a good credit score to avail an instant personal loan itself, but there are many banks and NBFCs which might give you the loan even if you have a fair credit score or even if you do not have a credit history. They will assess your creditworthiness by seeing if you meet their other criteria as well. You can then repay that loan’s EMIs on time which would result in creating a credit history and a healthy credit score for you.

Before you decide to apply for a Personal Loan, make sure you have an idea of your monthly EMIs. You can use a personal loan EMI calculator to get an estimated amount of the EMIs. You should consider taking an instant personal loan with Indiabulls Dhani to improve your credit score.

(Disclaimer: This is branded content)

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