Trans Union CIBIL Limited is India’s first and prominent Credit Information Company which maintains the record of applicant’s payment related to concerned loan and credit cards. The CIBIL score is referred to a three-digit score between 300 -900.

Any score above 700 is considered excellent according to market experts. However, it can differ from lender to lender. As per records, it just not has access to credit information of 600 million people but also 2,400 members which comprise lenders of all varieties.

A CIBIL credit report comprises vital information pertaining to your credit history and its reimbursement model. The report is necessary because it includes all times record of loan repayment.

On the basis of CIBIL credit report, banks and NBFCs enable advance to a borrower. The individual can check money related regulation by scrutinizing the credit report. Moreover, it helps the borrower to keep away from the debt trap.

Why CIBIL credit report is vital?

  • A CIBIL credit report includes each subtle information relating to your credit history and its reimbursement model
  • CIBIL credit report is vital these days on the grounds that:
  • It contains your all times record of loan repayment
  • Banks and FI’s enable advance to a borrower based on CIBIL credit report. A decent credit rating enables borrowers to get advances successfully from banks
  • You can check money related regulation by scrutinizing the credit report
  • It enables borrowers to keep away from the debt trap

How is the CIBIL score calculated?

While evaluating a loan application, your CIBIL score is considered first. The factors that affect your credit score are as follow:

Credit mix

The balanced mix between secured and unsecured loans is sure to have a positive effect.

Multiple enquiries

Many loan enquiries may have a drastic effect on your score as it showcases that the loan burden may go up in future.

Payment history

The late payment of installments or defaulting also has a bad impact on your CIBIL credit score.

High credit utilization

The excessive use of credit card leads to a rising debt burden over time which may adversely affect your score.

How to improve the CIBIL credit score?

Nowadays, the need for credit is very necessary. In case you have defaulted on your payments for any reason, your credit information report will immediately report it. You are unlikely to get any kind of loan with a bad credit score from any financial institution.

Here are some of the ways in which you can improve your CIBIL credit score:

Pay EMIs on time

The applicant’s payment history has a big impact on the CIBIL credit score. One of the best ways to maintain good credit history is to pay EMIs on time. With the regular payment of credit card bills, it becomes easy to build a high credit score. Also, ensure there are no bounces and penalties from the bank side.

Using your credit limit

It is necessary to use credit card prudently as over-utilization of credit card in a month can affect your credit score. Also not paying your outstanding amount and only paying the minimum amount due monthly can impact your score. For instance, if the credit card limit is Rs 50,000 then, one needs to make sure that he/she does not spend more than 50% of the concerned, which is, minimum Rs 25,000 on your credit card.

Monitor your co-signed, joint accounts

It is important to keep an eye on your joint or loan accounts for which you have stood as a guarantor. Being the guarantor, you become legally bound towards the timely repayment of the loan. Due to late payment or no payment, the score of yours will also get negatively affected. Your negligence could impact your ability to access credit when you need it the most.