The acronym CIBIL stands for “Credit Information Bureau (India) Limited.” It is one of India’s oldest credit information companies, founded in 2000. As its name suggests, the company collects and keeps track of the financial (credit) records of businesses and people. This means the company keeps track of payments and borrowing on credit cards and loans.
All of CIBIL’s information about credit comes from its affiliated partners, which include banks and credit institutions. CIBIL gets information about each person once a month, and then it generates the free CIBIL score and the CIBIL report. The CIBIL provides this report when financial institutions (such as banks) request it to approve or evaluate credit card or loan applications.
CIBIL score plays a vital role in determining whether or not a person or business is creditworthy. The Credit Information Companies Regulation Act of 2005 governs the CIBIL agency, which the Reserve Bank of India licenses.
If one wants to check their free CIBIL score online, they will receive a three-digit numeric score. This score typically falls between 300 and 900. The lowest number within this range is 300, and the highest is 900. A CIBIL score determines the creditworthiness of an individual.
How to Check Your free CIBIL Score Online?
Once per year, every individual or business is permitted to check their CIBIL score online for free. Follow the steps below to conduct an online CIBIL check:
Step 1: Visit the official CIBIL website to check your free CIBIL score by clicking the link to get a free credit report.
Step 2: Log in to a CIBIL account by entering one’s name, phone number, email address, etc.
Step 3: Complete the form with the following information for identity verification: gender, date of birth, postal address, and other identification documents such as a PAN card number, an Aadhaar number, etc.
Step 4: After completing the form, the next step is to accept the terms and conditions. The tool then displays the free CIBIL score and the credit report.
Why Should you Check your Free CIBIL Score Online?
The CIBIL score is the lender’s initial impression of the borrower. When someone fills out and sends in an application for a loan or credit card, the bank or financial institution checks the applicant’s free CIBIL score and report. If the score is high, the bank or financial institution will approve the loan right away. If the score is low, the application may be turned down.
A good score shows that a person is responsible with credit as they would most likely pay back the money they borrow from a bank or other financial institution on time. Conversely, a low CIBIL score indicates an individual’s financial irresponsibility.
So, many banks and other financial institutions use the credit scores generated by CIBIL to decide whether or not to approve a loan or credit card. However, it is crucial to note that the bank or financial institution is the only body deciding whether to give a loan. CIBIL is just an agency that gives the score and has no say in the decision.
How do you Maintain a Good Credit Score?
- If you desire an improvement in your free CIBIL score, you must pay your bills timely. Those with credit scores between 750 and 900 highlight that they pay their credit card bills promptly. Do not make late payments. It may have a significant effect on your CIBIL score.
- To keep a good credit rating, you must monitor your credit report. Customers frequently have errors in their credit reports that they are unaware of. Ensure that you continue to monitor your credit history to avoid such inconveniences.
- If you continue spending more than 50 percent of your credit limit each month, it will indicate poor financial management. When evaluating your loan application, potential lenders place a great deal of emphasis on your credit utilization. Therefore, limit your monthly expenses and spend no more than 30% of your credit limit to maintain a good free CIBIL score.
- Do not apply for multiple credit cards within a short period. Maintain a gap between credit card applications if you already have one. Apply for credit cards only if you are certain you can pay your monthly balances on time and without difficulty.
- Ensure that your previous loan accounts remain on your credit report. Activate your good accounts if you have a lengthy record of responsible repayment.
- Increase your credit limit to immediately reduce your credit utilization reports. Eventually, it will assist you in maintaining a good credit score.
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Use these tips if you don’t know how to keep your free CIBIL score high. Your CIBIL scores should not be taken lightly. It will make your loan-taking procedures more difficult over time. Check your CIBIL score frequently online for free. Keep track of your credit history and do what you need to do to ensure your CIBIL score is good before applying for a loan.
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