Know what is CIBIL and how to improve CIBIL score

how to improve CIBIL score

A bank or financial institution generally takes a few days to accept or reject your loan and credit card applications. They evaluate the loan amount based on factors such as your past credit history and current liabilities, along with reviewing your creditworthiness. Based on this, they calculate the loan amount that can be given to you. But do you know how they get the information they need to make this decision? How does the bank track your credit history? This is a simple process.

They go to a credit information company (CIC). One of the most reputed Credit Information Company of India is Credit Information Bureau (India) Limited, popularly known as CIBIL. Let’s find out how this bureau works.

What is CIBIL in hindi? – what is sybil

Established in August 2000, Credit Information Bureau (India) Limited i.e. CIBIL, is India’s first credit information company. Credit bureaus collect and store your credit information. Keeps records of all your credit card and loan information, performance and repayments. All this information is then shared with the financial institutions that request it so that they can assess the loan amount you are eligible for. According to the Reserve Bank of India (RBI), it is mandatory for all financial institutions in India to be a member of the CIC.

What is CIBIL SCORE in hindi? What is CIBIL Score

Credit Information Bureau (India) Limited (CIBIL) is the most popular of the four credit information companies licensed by the Reserve Bank of India. There are also three other companies licensed by the RBI to act as credit information companies. They are Experian, Equifax and Highmark. However, the most popular credit score in India is the CIBIL score.

CIBIL Limited has over 600 million logos and 32 million businesses’ credit files. CIBIL India is part of TransUnion, an American multinational conglomerate. Hence the credit score in India is known as CIBIL Transunion Score.

Banks and other lenders submit all loan and credit card details to CIBIL every month. Once the information is received and your records are processed, CIBIL prepares your Credit Information Report (CIR). There is no record of your savings in CIR. Your credit payment history is outlined over time across all loan types and credit institutions.

The CIBIL report contains complete information about the credit availed by you, such as home loan, car loan, overdraft facilities, credit card, personal loan, etc.

CIBIL Transunion Score is a 3-digit number that shows your credit history. This score is calculated on the basis of your credit report. Credit history is a record of the repayment of your loans. A credit report records your credit history from many sources, including banks, credit card companies, collection agencies.

A credit score is a mathematical algorithm that is applied to credit information to estimate how eligible you are to get a loan or credit card.

The CIBIL score ranges from 300 to 900. A high score means a good credit score. So it is better to take the score closer to 900. If your credit score is close to 300, there is a high chance that your credit card application will be rejected.

CIBIL study shows that loan providers are more likely to give you a loan if your score is above 720. If the loan provider decides to evaluate your application based on your CIBIL score, they will look at your full CIR and determine your eligibility.

It takes a while to build a CIBIL credit score and usually takes between 18 to 36 weeks to achieve a satisfactory credit score.


How to Get Free CIBIL Report – How to Get Free CIBIL Report

As per RBI directives, all credit information companies in the country including TransUnion CIBIL are required to provide a free credit report on request once in a year. To view your free CIBIL report, visit the official website of TransUnion CIBIL and click Get Click here Click on the tab to get your Free Annual CIBIL Score. Fill the required information through which you can get your CIBIL report.

Apart from this, you can also get information about your CIBIL score through paytm.


Factors that Affect Your CIBIL Score

Payment History

Credit score is calculated on the basis of your credit history. Any default or late payment in the recent past or the past few years negatively affects your credit score.

High Utilization of Credit Limit

Utilization percentage is the ratio of the total outstanding loans to your credit limit. If you repay your loan on time and your outstanding loan and outstanding credit card balances keep coming down, your utilization percentage will also drop. This is taken positively by your credit bureaus. But if your credit card or loan payments keep increasing over time, it shows that you are burdened with repayment. This negatively affects your credit score.

Higher percentage of unsecured loans

A higher percentage of secured loans like home loans or car loans in your loan portfolio is better for your credit score as these loans are generally available at affordable rates. While unsecured loans are easily available, they are also expensive such as personal loans, student loans, etc. The high ratio of unsecured loans gives the credit bureaus an impression that you have to service loans with higher interest rates.

High number of credit application

A large number of credit applications means that you are trying to get a loan frequently. This negatively affects your credit score.

How to Improve CIBIL Score in hindi – How to Increase CIBIL Score

Pay Dues on Time

To improve your rating, clearing all your credit card and loan dues is very important. Plan your credit card spending in such a way that you can pay your credit card bill before the due date. This is essential to build up your CIBIL score positively. Good financial behavior and discipline is what lenders look for in their customers.

The 30% rule of credit utilization

Never use your credit card to buy everything. You have to follow the 30% rule for credit utilization. Never use more than 30% credit and this will not only establish your credibility for financial discipline and financial management but will also increase your CIBIL score with positivity.

Enhanced credit limit

Whenever your rating is good, the bank will offer to increase your credit limit on your credit card. In such a situation, never refuse to get the increased credit limit. This does not mean that you have to spend more, but it only shows the confidence of the bank in you. You can also ask your bank to increase your credit limit, as increased credit limit always has plus points from rating agencies.

Check your CIBIL report for mistakes and rectify them

It is important to check your credit report regularly as it will tell you two things that are important for your credit score. First, there are defaulted or delayed payments in a loan or credit card that is taking your score down. and the information entered in the second credit report. It helps in correcting the credit score because if you notice that there are negative information like payment defaults or delays which is not correct according to you, you can always approach the bank and CIBIL to get the report rectified Huh.

Don’t keep applying for credit if rejected

If you have applied for a loan or credit card and your application is rejected, this information will be recorded on your credit report. If you immediately go to another bank and apply they will see your low score and previous rejection and will reject your application. The best thing to do in such cases is not to apply again and wait for the improvement in the score.

Avoid taking on too much debt at one time

The number of loans you can take should be minimal. If you take multiple loans at once, it will show that you are in an inefficient cycle where you have insufficient funds. As a result, your credit score will drop further. On the other hand, if you take a loan and repay it successfully, it will boost your credit score.

So friends, this was some important information with the help of which you can increase your CIBIL Score.

Hope this information will prove beneficial for you. If you have any question or suggestion, then please share your opinion through comment and don’t forget to subscribe us for free to get instant information about all our upcoming articles.

how to improve CIBIL score